The Nigerian National Petroleum Corporation (NNPC) Limited has gotten a $3 billion emergency crude repayment loan to support the naira and stabilise the foreign exchange market.
The company got the crude-for-cash funding from the African Export-Import Bank (Afreximbank) headquarters in Cairo, Egypt.
“The NNPC Ltd. and Afrexim Bank have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan,” NNPC said in a statement on Wednesday.
It added:“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.”.
The company said the loan will save Nigeria from approaching the International Monetary Fund (IMF) for loans, and bring respite to the local currency, which had depreciated significantly against the dollar over the past week.
Meanwhile,the federal government hinted that it sell stakes in about 20 state-run companies to raise funds and improve governance in the entities.
The Nigerian National Petroleum Corporation is among the firms the government may sell a stake in,the chief executive officer at the Ministry of Finance Incorporated, Armstrong Takang,was quoted as saying this in a report by Bloomberg.
He stated that the agency is considering options including strategic sales and initial public offerings and aims to implement the plan within 18 months.
He noted that some of the entities need the private sector to take controlling shares and the major consideration for the government is to create value rather than retain control.
He said, “It is better for us to own 49 per cent of a high-performing entity than 90% of an entity that is underperforming.”