Banking

Experts laud Afreximbank, UBA, NNPC over $3.3bn FX intervention

Efforts to boost Nigeria’s foreign exchange liquidity, especially the release of $2.25 billion FX support facility by the African Export-Import Bank (Afreximbank) have been lauded by financial analysts.

The $3.3 billion is expected to ease the FX liquidity crisis in Nigeria. The balance of the funds is expected this month.

Both Afreximbank and United Bank for Africa (UBA) closed on the liquidity support for Nigeria through a structured financing arrangement with the Nigerian National Petroleum Corporation Limited (NNPCL) on December 29, 2023.

Afreximbank is acting as the Mandated Lead Arranger along with UBA as the Local Arranger.

UBA is also acting as the Onshore Depository Bank for the transaction.

Gunvor, Sahara Energy and other major oil traders that are to join the parties.

The Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, has stated that the transaction will assuage FX concerns.

According to him, “We have a budget deficit, which can only be funded by borrowing or selling government assets or both. The other fundamentals that could increase our revenue base have been stretched  ambitiously. This gives the government no other option but to continue to borrow.

2023: UBA wins African Bank of the Year, Best Bank in 8 countries

“Although the $2.25 billion loan will bring FX respite in the short run, it is not likely to sustain the FX market for more than one month.

“So, we expect the exchange rate to drop marginally with such injections, speculations, and other uses will, however, quickly drain the market of the available FX.”

Also, the Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, said the Afreximbank loan would ease the pressure on the naira.

He said: “The Dangote and Port Harcourt refineries coming on stream in January will help retain the much-needed FX in the system, while other government initiatives will bring in foreign investors which will start yielding fruits from Q1, 2024.”

On his part, the Chairman, Chartered Institute of Bankers of Nigeria (CIBN), Abuja Branch, Prof. Uche Uwaleke, said any forex inflow is welcomed.

“It’s a case of half bread is better than none,” he said.

The Star

Editor

Recent Posts

Wike appoints ex-Fayose’s spokesman, Lere Olayinka, as SSA

The Minister of the Federal Capital Territory (FCT), Nyesom Wike, has appointed Lere Olayinka as…

13 mins ago

Burna Boy, Wizkid, Davido, Tems, Asake nominated for Grammy Awards

Nigerian singers - Burna Boy, Wizkid, Tems, Yemi Alade, Asake, and Davido - have been…

31 mins ago

NSIB recovers black box of crashed helicopter in Rivers

The Nigerian Safety Investigation Bureau (NSIB) has recovered the Flight Data Recorder (FDR) and Cockpit…

1 hour ago

N10m extortion: IGP vows punishment for corrupt police officers

The Inspector-General of Police (IGP), Kayode Egbetokun, has condemned alleged extortions by some police officers…

6 hours ago

Kaduna govt earmarks N93bn to boost water supply

The Kaduna State Government has announced plans to spend N93 billion over four years for…

10 hours ago

Trump picks campaign manager as White House chief of staff

United States President-elect Donald Trump, on Thursday, November 7, 2024, announced that one of his…

10 hours ago

This website uses cookies.