Nigeria’s NNPC secures $3 billion loan to stabilize FX market

By Felix Onuah

ABUJA (Reuters) – Nigeria’s state-oil firm NNPC said on Wednesday it has secured a $3 billion crude oil repayment loan from Cairo-based Afrexim Bank that will support the government’s reforms to stabilize the exchange rate market.

A commitment letter and termsheet was signed on Wednesday for an emergency $3 billion crude oil repayment loan, the state-oil firm posted on X, formerly known as Twitter.

The NNPC in a post tagged “relief for the naira”, said the loan will immediately disburse funds to support the “government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market”.

Africa’s largest economy has been looking to shore up its reserves and stem the fall of its currency, which has hit record lows on the black market two months after trading restrictions were loosened on the official market.

Acting central bank governor Folashodun Shonubi said on Monday the bank will take measures that will impact currency markets in days after meeting President Bola Tinubu to discuss ways to improve dollar liquidity on the official market.

Shonubi did not spell out what measures would be taken but said the president was concerned about the black market rate being a reference rate for local use and its inflation impact.

Tinubu, who embarked on the boldest reforms in decades, axed a costly fuel subsidy and devalued the naira, reviving foreign investor interest in the country, which has suffered from high inflation and a soaring debt-servicing cost burden.

But foreign investors have yet to return.

(Reporting by Felix Onuah; Writing by Chijioke Ohuocha, Editing by Alexandra Hudson, Elaine Hardcastle and Josie Kao)