In a statement by UBA, an initial $2.25 billion has been disbursed, with an additional $1.05 billion expected soon, making a total of $3.3 billion. The $3.3 billion emergency loan aims to stabilize Nigeria’s foreign exchange market and settle forex liabilities exceeding $7 billion.
This five-year loan bears a 6% per annum margin above the three-month secured overnight financing rate. Afreximbank President, Benedict Oramah, highlighted the bank’s commitment to aiding African economies during challenging times.
In his words, “Afreximbank stands by its member countries in good and difficult times.” The initial $2.25 billion will support Nigeria’s economic stability, enhance import financing, and foster industrialization.
Despite year-end pressures, the funds were swiftly committed, and Afrexim Bank compensated oil traders with physical oil cargoes for the loan. The transaction’s structure involves releasing 90% of excess cash from oil sales to Nigeria, shortening the loan maturity. NNPCL CEO, Mele Kolo Kyari, emphasized the facility’s contribution to macro-economic stability.
Nigeria commits to delivering 164.25 million barrels of crude oil at 90,000 barrels per day from 2024, settling the loan via Project Gazelle Funding Ltd, a special purpose vehicle in the Bahamas. Loan arrangers earn a 2% commission ($66 million), and a 2% per annum penalty applies in case of default.
