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Oil-for-cash-deal: Afreximbank to release $1bn balance to Nigerian govt in May



Fire outbreak leaves Nigeria's crude oil export on the decline

African Import Export Bank (AFREXIM Bank) is set to release the sum of $1.05bn to the federal government of Nigeria in May 2024.

This is the balance of the $3.3bn oil for cash facility arranged by Afreximbank, with repayment terms tied to crude cargoes from the Nigerian National Petroleum Company Ltd (NNPCL).

According to Bloomberg, Afreximbank’s Senior Executive Vice President for Finance, Administration, and Banking, Denys Denya, confirmed the impending release of the fund following the confirmation of the availability of the required crude oil.Read more

Denya confirmed that the loan would be finalised next month.

“The verification of the crude availability has happened so we expect in the next month to finalize the release of the balance,” Denya said.

READ ALSO:Petroleum Minister raises alarm over lack of crude oil for P/Harcourt, Dangote, other refineries

“Based on future production, you get the money now.”

Denya also said the facility has participation from commercial banks and oil traders, most of which have already secured internal approvals.

The Afreximbank oil-for-cash loan agreement with NNPC is expected to attract an interest of 11.85 percent per annum.

The loan is also expected to help with the acute foreign exchange shortage in Nigeria and stabilise the country’s financial system.

The loan aims at reviving Nigeria’s economy and enhancing the supply of hard currency in the local foreign exchange market. A substantial portion of it — two-thirds, was already disbursed in January.

The NNPC had earlier received the initial disbursement of $2.25 billion of the agreed $3.3 billion facility.

By: Babajide Okeowo

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