Nigeria is set to receive $1.05 billion from an Afreximbank syndicated loan backed by oil by the end of May to help revive its economy and boost the supply of hard currency on the local foreign-exchange market.
The funds form part of a $3.3 billion prepayment facility arranged by African Export-Import Bank that will be repaid using crude cargoes from Nigeria’s state-owned energy firm Nigerian National Petroleum Co Ltd.
Two-thirds of the largest syndicated loan raised by Africa’s biggest oil producer was disbursed in January.
“The verification of the crude availability has happened so we expect in the next month to finalize the release of the balance,” said Denys Denya, senior executive vice president for finance, administration and banking at Afreximbank. “Based on future production, you get the money now.”
The facility has participation from commercial banks and oil traders, most of which have already secured internal approvals, he said.
Nigeria has battled years of acute foreign-exchange scarcity arising from low crude production and a lack of economic diversification.
Since coming to office in May, President Bola Tinubu has worked to address the shortages with a series of reforms aimed at attracting foreign investors and boosting economic growth.
They include the central bank clearing a $7 billion backlog of unmet foreign-exchange obligations to industries and foreigners, allowing the naira to trade more freely and increasing interest rates steeply.
