Abdullahi Sule, the Governor of Nasarawa State, has shed light on the intended use of the $3 billion loan recently announced by the National Petroleum Company (NNPC) Limited.
The loan, according to Sule, will be utilized by the Central Bank of Nigeria (CBN) to bolster the stability of the Nigerian Naira, which has faced depreciation, reaching N1,000 per dollar in the parallel market amid ongoing exchange rate volatility.
Newly appointed CBN governor
Speaking following the 136th National Economic Council (NEC) meeting in Abuja, Governor Sule explained that the loan’s purpose is to reinforce the Naira’s strength against foreign currencies.
However, he noted that Yemi Cardoso, the newly appointed CBN Governor, and his team require some time to establish the necessary strategies for achieving this stabilization.
Sule emphasized, “The $3 billion that was taken is in order to stabilize the Naira. As you have seen, we have a new team at the CBN, and the new team that is just coming in is asking for a little bit of time to work out the modalities.”
In addition to securing the loan, Sule highlighted the importance of planning the stabilization process, which is expected to be a time-consuming endeavor.
He also revealed that Cardoso has already begun outlining his plans for stabilizing the Naira.
The loan in question was initially disclosed in August when NNPC announced a $3 billion crude-for-cash loan agreement with the African Export–Import Bank (Afreximbank).
NNPC clarified that the loan would be promptly disbursed to support the federal government’s fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.
However, concerns and uncertainty have arisen regarding the loan’s disbursement. Reuters reported that Afreximbank is actively seeking oil traders to purchase NNPC’s crude to generate the necessary funds for the $3 billion loan.