Nigeria set to receive important financial support from Afrexim Bank to strengthen Naira

The Nigerian government is expected to take delivery of the long-awaited forex exchange support facility from Afrexim Bank as the country is set to loosen the pressure on the forex shortage that has plagued the economy.

According to a report by BusinessDay, the bank signed the deal on Thursday, December 28, 2023, and should come before the end of December 2023.

The development has been hailed as a significant boost for the economy as the arrival of funds would help reduce the exchange rate volatility and ease inflation.

The report said the Minister of Finance and Coordinating Minister for Economy, Wale Edun, said the bank is in the best place to confirm the funds' disbursement.

Edun reportedly said: "This is a transaction in process with Afrexim, and it is for them to make the announcement relating to fund disbursement."

He said the country is looking at a range of support schemes to improve government revenue and foreign exchange liquidity.

The Afrexim Bank's disbursement could be a much-needed help for Nigeria to boost investor confidence and improve credit lines for the country.

While Afrexim is the lead arranger, there are sub-lenders, including Sahara Energy Group, UBA, and Guvnor, one of the world's largest energy trading houses by turnover.

Energy policy analyst Adeola Yusuf believes the deal will melt the ice that has enveloped the naira in an endless cycle of volatility since 2023.

"It is a good development. Nigeria is still battling an acute FX shortage, which will give the country a breath of fresh air."

"If the fund comes, it will boost the naira's recovery," he said.