Good Tidings For Nigeria, Receives $2.25bn As First Tranche of $3.3bn Afrexim Bank Loan, Balance in January

Nigeria has received $2.25b out of the $3.3bn of the long-awaited foreign exchange support facility from Afreximbank on Friday which is aimed at helping the acute FX shortage that has hampered the economy. 

ARISE News can confirm that $1.05bn will be received in the first week of January.

Speaking to ARISE News, minister of finance, Wale Edun, said it was in the position of Afrexim to announce the disbursement at the appropriate time.

However ARISE News can confirm that the first tranche of $2.25bn hit the federal government’s account on Friday while $1.05bn is due next week.

While Afrexim is the lead arranger of the $3.3bn loan, some other sub-lenders include VITOL, Guvnor, one of the world’s largest energy trading houses by turnover, Sahara Energy group, Oando and UBA which chipped in $100 million.

The liquidity support for Nigeria through a structured financing arrangement with NNPC Limited sees Afrexim Bank acting as the mandated lead arranger along with United Bank for Africa as the local arranger.

The transaction which is expected to ease the FX illiquidity in Nigeria, will have UBA as the Onshore Depository Bank.

Edun said work is being done to put in place a comprehensive range of solutions to Nigeria’s economic challenges including improving finances through leveraging technology to raise tax collection as well as ease the foreign exchange position.

He said he’s looking at a range of support mechanisms capable of bringing about all round improvement in government finances and FX liquidity and is optimistic Nigeria is on the right path.

The transaction is in line with the Renewed Hope Agenda of President Bola Ahmed Tinubu’s commitment to stabilize the FX market and ease inflationary trends that has beleaguered the Nigerian economy since the administration took over.

Other developments that will liquefy the FX market are also in the works as leading domestic & African focused entities develop solutions towards resolving economic issues in the country.

Earlier in August, the Nigerian National Petroleum Company Limited (NNPC) announced that it had secured a $3 billion emergency loan from the African Export-Import Bank to stabilise the country’s volatile foreign exchange market.

The new deal came over a year after the national oil company said it similarly secured a $5 billion corporate finance commitment from the Prof. Benedict Oramah-led bank to fund major investments in Nigeria’s upstream sector.

Although the NNPC’s statement was silent on specifics in terms of the volume of each instalment of the FX expected and the quantity of crude oil to be repaid, the deal was expected to boost foreign exchange liquidity into the country and prop up the value of the naira against the dollar.

Business leaders in Lagos have praised the effort of the Afrexim bank, adding that the funds would serve as a major catalyst for the economy which could help curtail the exchange rate volatility and ease inflation.

Chioma Kalu

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