Business

EXPLAINED: 8 Things You need to know about NNPC’s $3billion Emergency Crude Repayment Loan from Afrexim Bank

EXPLAINED: 8 Things You need to know about NNPC’s $3billion Emergency Crude Repayment Loan from Afrexim Bank

 

 

1. What is the $3 billion loan about?
The NNPC Ltd. secured an emergency $3 billion crude oil repayment loan from AFREXIM Bank. This is not a crude-for-refined products swap but an upfront cash loan against proceeds from a limited amount of future crude oil production.

 

 

2. Is this loan risky for NNPC Ltd. or the Nigerian Treasury?
No. The exposure for NNPC Ltd. is very limited, covering just a fraction of their entitlements. Additionally, there are no sovereign guarantees tied to this loan.

3. What’s the benefit of this loan to Nigeria?
The loan will assist NNPC Ltd. in settling taxes and royalties in advance. It will also equip the Federal Government with the necessary dollar liquidity to stabilize the Naira, with limited risk.

4. How will the loan be disbursed?
The funds will be released in stages or tranches based on the specific needs and requirements of the Federal Government.

5. Will this affect fuel prices?
A strengthened Naira as a result of this initiative will lead to a reduction in fuel costs. This means that if the Naira appreciates in value, the cost of fuel will drop and further increases will be halted.

6. What about subsidies? Are they coming back?
No. A stronger Naira will result in lower prices from the current level, making subsidies unnecessary. The deregulation policy remains unchanged.

7. How will the loan be repaid?
The loan will be repaid against a fraction of proceeds from future crude oil production. It’s a strategic move that ensures a balance between our current economic needs and future production capabilities.

8. What is the difference between this and previous swap deals?
This is not a crude for refined products agreement where the government does not earn any proceeds from the swap.

Sahara Weekly

Sahara weekly online is published by First Sahara weekly international. contact saharaweekly@yahoo.com

Recent Posts

Professor Fidelis Oditah is Wrong about the EFCC By Dele Oyewale

Professor Fidelis Oditah is Wrong about the EFCC By Dele Oyewale Professor Fidelis Oditah’s recent…

3 hours ago

Ijebu Man of The Year Awards: Prince Segun Kaka Set to be Honored for Outstanding Legislative Contributions*

**Ijebu Man of The Year Awards: Prince Segun Kaka Set to be Honored for Outstanding…

3 hours ago

Kingmaker of Muguland: Dr. Banwo Releases Leaked Preview of Highly Anticipated Thriller

Kingmaker of Muguland: Dr. Banwo Releases Leaked Preview of Highly Anticipated Thriller   Dr. Ope…

5 hours ago

The Power of Building Resilience” By Prudent Ludidi

"The Power of Building Resilience" By Prudent Ludidi   Ladies and gentlemen, Life is unpredictable.…

9 hours ago

Oil marketers counter Dangote

Oil marketers counter Dangote over allegation of substandard product importation   The Depots and Petroleum…

10 hours ago

Dr. Dolapo Badru Distributes Food Items, Cash Gift, Clothing Materials To Elderly Constituents

  • Provides Free Medical Care Service • Lagos GAC Chairman, Prince Olusi Lauds Social…

10 hours ago