The African Export-Import Bank as well as the United Bank for Africa have disbursed $2.25 billion from a $3.3 billion oil-for-cash loan facility created by the Nigerian National Petroleum Company Limited.
The first payment of $2.25 billion has been disbursed, with a second tranche of $1.05 billion scheduled to follow.
The $3.3 billion emergency loan was obtained to stabilize the country’s volatile foreign currency market and to ease the country’s $7 billion in outstanding FX commitments.
The five-year arrangement includes a 6% annual margin over the three-month secured overnight lending rate.
According to a UBA announcement, an initial payout of $2.25 billion has been made, with a subsequent second release of $1.05 billion expected to be disbursed.
The $3.3 billion emergency loan was obtained to stabilize the country’s volatile foreign currency market and to ease the country’s $7 billion in outstanding FX commitments.
The five-year arrangement includes a 6% annual margin over the three-month secured overnight lending rate.
In response to the facility’s accomplishment, Afreximbank President and Chairman of the Board of Directors, Benedict Oramah, underlined the bank’s commitment to assisting African economies when it is most needed.
“Afreximbank stands by its member countries in good and bad times, the initial $2.25 billion disbursed under the facility will help Nigeria’s long-term economic stability, improve access to import financing for raw materials and key goods, and promote industrialization and trade development activities.
“Despite the usual year-end pressures, our partners and investors committed the funds needed in record time. We appreciate their help,” he continued.
According to reports, Afrexim Bank engaged oil traders, rewarding them with physical cargoes of oil to fund the loan. The bank was actively determining the particular quantity of oil to supply these dealers in exchange for the provided finance at the time of the report.
The Chief Executive Officer of NNPCL Group, Mele Kyari, claimed that the proceeds of the facility were given to the federal government as one of the initiatives to improve macroeconomic stability.
“The participation of global, international and regional syndication firms is a further testament to the lending market’s appetite for financing sponsored by NNPCL and signifies solid market confidence in Nigeria,” he stated.
