Nigerian govt goes after another $2bn cash-for-crude loan to stimulate economy

Indications have emerged that the federal government via the Nigerian National Petroleum Corporation (NNPC) Limited may be planning to borrow an additional $2 billion in crude oil-backed loans from international creditors to boost its financial inflow and stimulate the economy.
Reuters reports that sources familiar with the matter confirmed the details on Tuesday.
This follows a similar earlier $3.3 billion oil-backed loan from Afrexim Bank.
In August 2023, following the removal of fuel subsidy and the unification of the forex market which significantly weakened the naira, the federal government through the Nigerian National Petroleum Corporation (NNPC) Ltd secured a $3.3 billion loan from AfreximBank to shore up liquidity in the market.
Mele Kyari, the Group Chief Executive Officer (GCEO) of the NNPCL disclosed that the national oil company was in discussions with international creditors to raise an oil-backed credit facility.
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Kyari said the credit facility would help to boost its finances and allow investment in the oil and gas sector.
However, the GCEO did not disclose the international financial body with which NNPC was in talks, nor the amount it was planning to raise from the transaction.
He did mention that the cash raised would be used for all of NNPC’s business activities, including supporting production growth.
“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act.
“It will be a syndication with critical but regular partners who have been in business with our company to forward the cash,” Kyari said.
This new $2 billion loan, currently under discussion, is seen as crucial for NNPC to manage and pay off these rising subsidy expenses, according to these sources.
By: Babajide Okeowo
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