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The African Export-Import Bank (Afrieximbank) has provided a lifeline of $925m to the Federal Government to support the forex market and fulfill its dollar obligations.
The local currency has been facing pressure from the United States dollar and other major global currencies due to a shortage of forex.
The Central Bank of Nigeria has taken steps to strengthen the naira, which had approached N1,100/$ in early April.
Despite these efforts, the naira continues to be affected by forex shortages and speculative activities in the forex market, causing it to weaken against the US dollar and other prominent currencies.
The African Export-Import Bank on Thursday, provided a lifeline of $925m to the Federal Government, coinciding with the naira closing at N1,481 against the United States dollar on the official market.
Afreximbank announced the disbursement of an additional $925m as part of the $3.3bn crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company Limited.
This facility aims to help the Federal Government meet its dollar obligations, support the CBN in stabilizing the foreign exchange market, and provide funding for NNPC, among other purposes.
Afreximbank has recently increased the funded facility size for Project Gazelle Funding Limited to a total of $3.175 billion through an accordion disbursement.
Coordinated by Afreximbank, the arrangement raised $925 million from a group of crude oil off-taker lenders, including the Oando Group and Sahara Energy Resource Limited.
In addition to its role as Mandated Lead Arranger, Afreximbank also acted as Technical and Modelling Bank, Bookrunner, Facility Agent, Offshore Account Bank, Intercreditor Agent, and Collateral Agent for the transaction.
This funding is expected to support Nigeria’s macroeconomic stability, long-term economic growth, industrialization, and trade development efforts.
This announcement comes after the success of the initial accordion tranche of the $3.3 billion facility, which received funded commitments totaling $2.25 billion in December 2023. With the $925 million accordion arrangement, the total amount disbursed now stands at $3.175 billion.
President and Chairman of the Board of Directors of Afreximbank, Prof. Benedict Oramah, commented on the disbursement, emphasizing the bank's role as a crucial development partner for Africa and its commitment to supporting member.
Oramah characterized the initial facility as a significant achievement, being the largest crude oil-backed facility in Nigeria and one of the most substantial syndicated debts raised in Africa.
He highlighted that the closing of the first accordion illustrated a strong market demand for well-structured commodities-backed instruments.
The Group Chief Executive Officer of NNPC Limited, Mele Kyari, praised Afreximbank's management and team for their investment approach and active involvement in fostering prosperity.
