Former Vice President of Nigeria, Atiku Abubakar, on Thursday raised concerns about the repayment plan for the $3.3 billion emergency loan acquired by Nigerian National Petroleum Company Limited, NNPCL to stabilize the naira.
Writing on his official X account, Atiku said the federal government needs to explain the details of the transaction, adding that the interest rate on the loan will require Nigeria to pay back the sum of $12 billion in the near future.
He said while the federal government claimed that the interest rate on the loan is only 12%, the crude-for-cash arrangement will amount to a $7 billion repayment structure by the federal government.
What Atiku is saying
Recall that the Nigerian National Petroleum Company Limited (NNPCL) secured a $3.3 billion emergency crude repayment loan from Afreximbank to stabilize the foreign exchange market on August 16, 2023.
Responding to the development, the former vice president alleged the that details of the loan remain obscure and the repayment structure appears ’shady’.
He said,
- “The curious thing about this transaction is that up till now, the Federal Government continues to keep mum about it, and the only information available to the public on the mega-deal is coming only through unofficial sources from the NNPC.
- “The deal is supposed to be a crude-for-cash loan arranged by the African Export-Import BanNNP
- “Nigeria’s current Barrels Produced Daily (BPD) is 1.38 million, and according to the Project Gazelle deal, Nigeria is to supply 90,000 Barrels of its daily production, starting from 2024 till it is up to 164.25 million barrels for the repayment of the loan.
- “Now, this is where the details get disturbing because Nigeria’s benchmark for the sale of crude per barrel in 2024 is $77.96. A simple multiplication of that figure by 164.25 will give us a whooping $12 billion
- “It is inconceivable that the Federal Government will lead the country to take a loan of $3.3 billion with an interest rate that is not more than 12%, but with estimated repayment amounting to $12 billion.
- “That is a humongous differential of about $7 billion between what is in the details of the deal on paper and what indeed is the reality.”
What you should know
- Earlier in August 2023, the Nigeria National Petroleum Company (NNPC) sought a $3.3 billion emergency crude repayment loan from Afreximbank to stabilize the foreign exchange market.
- Nigeria will pay an interest of 11.85% per annum on the $3.3 billion “pre-export finance facility” (PxF) arranged by Afreximbank.
- Afreximbank confirmed an initial disbursement of $2.25 billion under the crude oil prepayment facility.
- According to a statement by the bank, a second tranche of $1.05 billion is expected to be disbursed subsequently.
