The plan by the Nigeria National Petroleum Company Limited (NNPCL) to secure Afrxim Bank $3 billion crude oil repayment loan to address the current foreign exchange hiccups has attracted the reactions of experts and civil society organisations across Nigeria.
A development consultant and public analyst, Mr Jide Ojo, slammed the NNPCL for negotiating for the facility.
“We all know what happened with the $800m they sought from the World Bank over which the National Assembly still had to give approval, even after that, there has not been any disbursement.
“The National Assembly members are on recess and we are talking of emergency borrowing. The question is whether we are not putting the cart before the horse. When did President Tinubu realise that he needed $3 billion dollars to buffer the exchange rate.
“Why are we borrowing, when we could have improved on our revenue through the stoppage of oil pipeline vandalism and theft?
“What has the President achieved since he assumed office beyond the rhetoric that they have been able to save over N1trillion in the subsidy regime?” he queried.
Also, Associate Chair-Technical Working group on Protection of Civilians, Jaye Gaskia is of the opinion that, essentially, a crude oil repayment loan is a loan that will advance cash on certain terms, but will be repaid with crude oil (or crude oil sales) at agreed interest rate, in this case 11%.
He said as part of an integral fiscal policy, in coordination and synergy with monetary policy, it should offer some relief, particularly relieving pressure on scare forex.
He said in the short to medium term, and as part of a broader policy mix and interventions, it should be able to stop the volatility of the exchange rate, and stabilise the forex market, saying: “That ultimately is the aim.
“It is important to also situate this intervention within the context of the CBN’s clamp down on currency speculators. In that context, both fiscal and monetary interventions will be mutually reinforcing.
“The NNPCL is here acting as a guarantor of the $3billion loan from Afrexim Bank, thus enabling both the Federal Government and the CBN to have access to liquid cash outside of the external reserve, for use to periodically intervene in the forex market to shore up the value of the Naira, and reduce the pressure on it.
“If properly implemented and synergy and coordination is ensured in the policy implementation process, then there is a better chance for success,” he said.
