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Nigeria to commit $3bn Afrexim Bank loan to stabilizing its currency

Published

1 year ago

September 29, 2023

Nigeria’s Economic Council, which is a constitutionally recognized body comprising national and subnational entities saddled with some economic development responsibilities, decided on Thursday to expend the $3bn emergency loan-for-crude oil secured in August towards stabilizing the country’s currency, the Naira.

The naira has fluctuated in recent months following inconsistencies In the Investors & Exporters’ window, and worsened in the parallel market, hitting N1000/$ earlier this month.

State-owned enterprise, the Nigerian National Petroleum Company (NNPC) Limited revealed that it secured an emergency $3bn crude repayment loan from Afrexim Bank to relieve pressure on the naira.

It said the loan would enable it to settle taxes and royalties in advance and afford the government necessary dollar liquidity to stabilize the naira, with limited risk.

A member of the NEC, Nasarawa State Governor, Abdullahi Sule, while briefing State House correspondents after the 136th NEC meeting, which was held at the Aso Rock Presidential Villa, Abuja, said the group was confident the plan around the economic intervention would yield result.

“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 $3bn shall be useful to us down the line.”

When asked if a supplementary budget would be required and when the intervention would begin, Sule responded, “The $3 billion that was taken to stable the naira. As you can see, the CBN has a new team, and the team that is just starting out is asking for some time to work out the modalities.

“It is one thing to take the loan it is another to plan the process of the stabilisation because it’s going to take a while.

“The CBN governor was just confirmed a few days back and he started rolling out his plans of what to do.”

On the supplementary budget, Sule said, “Supplementary budget is a request that will come as a result of whatever is happening right now. I’m not sure there is a need for a supplementary budget immediately. So far, there have been no supplementary budget requests that were presented to NEC.”

Being a major oil producer, Nigeria’s public finance should significantly improve given the recent rise in oil prices, and the removal of fuel subsidy but industrial-scale crude oil theft and lack of local refineries has been a huge challenge, creating a reverse reality.

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IMF mission concludes 4th loan program assessment in Egypt

Published

1 day ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.