The National Economic Council (NEC) has confirmed that the $3 billion emergency loan obtained by the Federal Government in August will be utilized to stabilize the Nigerian currency, the naira, which has experienced significant fluctuations in both the Investor’s & Exporters’ window and the parallel market, reaching N1000/$ earlier this month.
Nasarawa State Governor, Abdullahi Sule, made this announcement after the 136th NEC meeting held at the Aso Rock Presidential Villa, Abuja. He expressed confidence that the funds, in conjunction with proposed revenue enhancement measures, would be instrumental in achieving this goal.
On August 16, the Nigerian National Petroleum Company Limited disclosed that it had secured a $3 billion emergency loan for crude oil repayment from Afrexim Bank, to alleviate pressure on the naira. This loan would also enable the settlement of taxes and royalties in advance.
It would also equip the Federal Government with the necessary dollar liquidity to stabilize the naira, with limited risk.
However, the naira has continued to fluctuate in the I&E window and worsened at the parallel market, hitting N1000/$ the week before last.
It recovered on Friday, September 22, 2023, after President Bola Tinubu nominated Olayemi Cardoso as CBN governor. The naira moved upwards by N10 against the dollar in the black market, closing at N990/$1.
Asked when the intervention would kick in and if there would be a need for a supplementary budget, Sule said “The $3bn that was taken to stabilize 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 to work out the modalities.
“It is one thing to take the loan it is another to plan the process of the stabilization 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 “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.”
