|
Listen now
|
Nigeria announced this week that it expects to receive $10 billion of inflows of which $7.0 billion is expected from NNPC’s forward sales and $3.0 billion from Qatar, according to a research note by Cardinal Stone Partners.
The inflows will help ease a liquidity crunch weighing on the naira.
The government has a “line of sight” on the inflows into the country “in weeks rather than months,” Finance Minister Wale Edun said at the Nigerian Economic Summit in the capital, Abuja, on Monday.
President Bola Tinubu’s government has been struggling to stem the decline in the currency. The inflows will add to other steps being taken by the government to boost foreign-exchange liquidity, including improving market transparency and allowing domestic entities to issue foreign-exchange instruments, Edun said.
Further out, given that both the fiscal and monetary authorities have shown commitment to improving the FX liquidity in the country, upside potential for the naira might be in the offing in the near to medium term, Cardinal Stone Partners said.
“For context, the government plans to raise $10.0 billion, The expected inflows could be higher if the government can obtain the $3.0 billion Afrexim bank loan and can get the World Bank facility of $5.0 billion ($3.5 billion for project development and $1.5 billion to support key policy reforms),” the research firm said.
Get More of our proprietary news and analysis as MoneyCentral is now on WhatsApp Channels 
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!