The National Economic Council (NEC) confirmed on Thursday that the $3 billion emergency loan for crude oil secured by the Federal Government in August will be used to stabilise the Naira.
News About Nigeria reports that the naira has experienced ongoing fluctuations, particularly in the Investors & Exporters’ window, and its value further deteriorated in the parallel market, reaching N1000/$ earlier this month.
Following the 136th NEC meeting held at the Aso Rock Presidential Villa in Abuja, the Governor of Nasarawa State, Abdullahi Sule, addressed State House correspondents.
He expressed confidence in the loan’s utility for stabilizing the naira, stating, “So, we are very confident and we still believe very strongly that with the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”
On August 16, the Nigerian National Petroleum Company Limited announced that it had secured an emergency $3 billion crude repayment loan from Afrexim Bank.
The loan’s primary purpose was to alleviate pressure on the naira, enabling the settlement of taxes and royalties in advance and providing the Federal Government with essential dollar liquidity for naira stabilisation, minimising risk.
Despite these measures, the naira continued to fluctuate in the I&E window and experienced further depreciation in the parallel market, briefly reaching N1000/$.
It experienced a recovery on September 22, 2023, after President Bola Tinubu nominated Olayemi Cardoso as the new CBN governor.
This appointment led to a N10 increase in the naira’’ value against the dollar in the black market, closing at N990/$1.
When asked about the timing of the intervention and the potential need for a supplementary budget, Governor Sule clarified, “The $3 billion was obtained to stabilize the naira. As you have seen, we have a new team at the CBN, and they are requesting some time to work out the modalities.
“Taking the loan is one thing; planning the stabilisation process will take time. The CBN governor was just confirmed a few days ago, and he has begun to roll out his plans for action.”
Regarding the possibility of a supplementary budget, Sule indicated, “A supplementary budget request would arise as a result of the current situation. At the moment, there is no immediate need for a supplementary budget, and NEC has not received any supplementary budget requests.”