Abdullahi Sule: CBN will use NNPC’s $3bn loan to stabilise naira — but Cardoso needs time to plan

Abdullahi Sule, the governor of Nasarawa state, says the $3 billion loan announced by the National Petroleum Company (NNPC) Limited in August will be used by the Central Bank of Nigeria (CBN) to stabilise the naira.

The naira had weakened to N1,000 per dollar in the parallel market on Tuesday, as exchange rate volatility persists in the open market.

Speaking on Thursday after the 136th National Economic Council (NEC) meeting in Abuja, Sule said the loan will be disbursed to strengthen the naira against foreign currencies.

However, he said Yemi Cardoso, the new CBN governor, and his deputies need time to settle in before the stabilisation can be achieved.

“The $3 billion 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 walk out the modalities,” Sule said.

According to Sule, aside from obtaining the loan, there is also a need to plan the stabilisation process as it is going to take a while. 

The governor said Cardoso has already started rolling out his plans on what to do to stabilise the naira.

UNCERTAINTY SURROUNDS NNPC’S $3 BILLION LOAN

In August, the NNPC announced that it signed a $3 billion crude-for-cash loan agreement with African Export–Import Bank (Afreximbank).

NNPC said the loan will be disbursed immediately to enable the oil company to support the federal government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.

But Nigerians are uncertain about the disbursement of the fund, after Reuters reported on Wednesday, that Afreximbank is looking for oil traders to buy NNPC’s crude to raise the $3 billion loan.

Nonetheless, Sule believes the loan would be useful to finance the federal government’s plans to improve revenue.