Afrexim Bank seeking buyers for NNPC crude to finance $3bn loan as Dangote speaks of new plan

Afrexim Bank is reportedly looking to find buyers for Nigeria’s crude oil as it seeks to consummate its $3 billion swap deal with the Nigerian National Petroleum Company Limited (NNPC).

The national oil company said the loan is not a public debt and is meant to act as a buffer for the naira, which depreciated to N1,000 to a dollar on Tuesday, September 26, 2023.

A Reuters report quoting three sources stated on Wednesday, September 27, 2023, that Afrexim Bank is now in talks with oil traders to finance the loan.

Recently, the bank approached oil dealers seeking to persuade them to buy Nigeria’s crude to finance the $3 billion loan requested by NNPC.

Reuters said one of the sources said prospective buyers are asking for terms.

The new Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, earlier said one of his priorities is clearing the backlog of foreign exchange obligations to Nigerian banks, which analysts say could be as high as $7 billion.

The Forex backlog severely affects the availability of dollars on the official market, leading to importers, businesses, and individuals flooding the black market in search of dollars.

A source also said traders who provide cash would be repaid in physical oil cargoes.

President Bola Tinubu began reforms that allowed the official exchange rate to fall against the dollar, causing a rise in petrol prices.

There was a close disparity between the official and parallel markets in June, but it has since widened by almost N300. The naira devaluation has also affected the petrol pump price, which rose significantly in the three months.