The National Economic Council has officially backed the Federal Government’s decision to use the $3 billion emergency loan obtained in August for the purpose of stabilising the Nigerian Naira.
The Naira has been fluctuating in the Investors’ and exporters’ window and a significant depreciation in the parallel market, reaching N1000/$ earlier this month.
While speaking to State House correspondents after the 136th NEC meeting, which was hosted at the Aso Rock Presidential Villa, Abuja, the Nasarawa State Governor, Abdullahi Sule, said, ‘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.’
The Nigerian National Petroleum Company Limited made headlines on August 16 after revealing its successful acquisition of a vital $3 billion crude repayment loan from Afrexim Bank. This significant development is intended to ease the pressure on the Nigerian Naira.
Read also: Naira Depreciation Drives External Debt to ₦13 Trillion
According to their statement, the loan will empower them to make advance payments for taxes and royalties.
In addition, it would fortify the Federal Government with indispensable dollar liquidity, enabling them to bolster the Naira’s stability while keeping risks in check.
Even so, the Naira’s volatility persists in the Investors’ and exporters’ window, and it took a turn for the worse in the parallel market, reaching N1000/$ just two weeks ago.
The Naira saw a resurgence on Friday, September 22, 2023, following President Bola Tinubu’s nomination of Olayemi Cardoso as CBN governor. In the black market, it gained N10 against the dollar, ultimately closing at N990/$1.
When questioned about when the intervention would commence and if a supplementary budget would be necessary, Sule said ‘The $3bn that was taken in order to stabilise the naira. As you have seen we have a new team at the CBN and the new team that is just coming in is asking for a little bit of time in order 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.’
Speaking about 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.’