Economy
Nigeria to Receive $1.05bn Second Tranche Oil Loan from Afreximbank in May
By Adedapo Adesanya
Nigeria will receive the $1.05 billion second tranche of the $3.3 billion crude repayment loan from the African Export-Import Bank (Afreximbank) in May.
The loan backed by oil is part of efforts to revive the Nigerian economy and boost the supply of the Naira in the FX market.
The first disbursement of $2.25 billion was made earlier this year and it was reported that the second tranche of $1.05 billion is expected to be disbursed subsequently. This will now be disbursed next month.
Afreximbank successfully arranged the syndicated $3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Company (NNPC) Limited.
The landmark financing is Nigeria’s largest crude oil prepayment facility and one of the largest syndicated loans raised in Africa in 2023. The 5-year facility carries a margin of 6.0 per cent per annum above the 3-month secured overnight financing rate (SOFR).
The transaction structure has an embedded price balance mechanism where 90 per cent of all excess cash from the sale of the committed barrels (after debt service) will be released while the balance of 10 per cent will be used to repay the facility, effectively shortening the final maturity of the facility and freeing cash flow from future pledged cargoes for use by Nigeria.
The initial participating lenders are Afreximbank, Africa’s multilateral trade finance institution, Gunvor International BV, a Geneva-based multinational energy and commodities trading company and Sahara Energy Resources Limited, an African-owned, leading international energy and infrastructure conglomerate.
Speaking then after the first tranche was paid to the country, Afreximbank President and Chairman of the Board of Directors, Mr Benedict Oramah, explained that “this facility further demonstrates the Bank’s commitment to supporting African economies when such assistance is most needed. Afreximbank stands by its member countries in good and difficult times.
“The disbursement of the initial $ 2.25 billion under the facility will support Nigeria’s long-term economic stability, ease access to import financing for raw materials and essential goods, and support industrialization and trade development efforts. We are pleased that despite the typical year-end encumbrances, our partners and investors rallied and raised the funds required in record time. We thank them for their support”.
The NNPC Group Chief Executive Officer, Mr Mele Kolo Kyari, on his part, noted that “the proceeds of the facility have been made available to the Federal Republic of Nigeria as one of several efforts towards improving macro-economic stability. The participation of global, international and regional syndication firms is a further testament to the lending market’s appetite for financing sponsored by NNPCL and signifies solid market confidence in Nigeria.”
By Adedapo Adesanya
The Naira free-fall against the US Dollar continued in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, June 18, losing 0.24 per cent or N3.23 to trade at N1,363.30/$1 compared with the previous day’s N1,360.07/$1.
However, the domestic currency appreciated against the Pound Sterling in the official market during the session by N19.12 to trade at N1,805.69/£1 versus midweek’s N1,824.81/£1, and gained N12.89 on the Euro to sell at N1,565.07/€1, in contrast to the preceding day’s N1,577.96/€1.
At the GTBank FX counter, the Naira lost N1 against the Dollar to trade at N1,373/$1 versus Wednesday’s closing rate of N1,372/$1, and at the black market, it remained unchanged at N1,385/$1.
Tightness in FX liquidity continued to pressure the local currency, contributing to a decline in the official exchange rate due to rising demand for foreign payments.
Analysts also attribute the market liquidity dynamics to the lack of substantial Open Market Operation (OMO) bill positioning by foreign portfolio investors, who are key sources of hard currency inflows for the Central Bank of Nigeria (CBN).
The apex bank’s daily FX report revealed that interbank FX turnover increased to $69.918 million across 85 interbank transactions, up from $54.293 million the previous day.
As for the cryptocurrency market, Bitcoin (BTC) traded below $63,000 after losing 1.7 per cent to close at $62,742.28 on Thursday, as risk assets sold off worldwide, erasing the gains it made earlier in the week on the back of the US-Iran peace deal.
The pressure came from a wider retreat in markets as shipping through the Strait of Hormuz returned to normal under the signed US-Iran deal and eased what had been a historic supply shock.
Attention now turns to talks over Iran’s nuclear programme, with Vice President JD Vance saying a 60-day clock to settle the deal’s details has started.
During the session, Solana (SOL) crashed by 3.3 per cent to $68.68, Ripple (XRP) depreciated by 2.7 per cent to $1.13, Cardano (ADA) slid 2.4 per cent to $0.1606, Binance Coin (BNB) slumped 2.0 per cent to $576.11, Dogecoin (DOGE) slipped by 1.9 per cent to $0.0826, and Ethereum (ETH) went down by 1.7 per cent to $1,696.74.
However, TRON (TRX) improved by 0.1 per cent to $0.3204, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Dipo Olowookere
The refusal of the bears to give the bulls a chance further depleted the Nigerian Exchange (NGX) Limited by 1.41 per cent on Thursday.
Persistent selling pressure left the equity market depressed at the close of business yesterday, with profit-taking still witnessed in the financial services sector.
The All-Share Index (ASI) decreased by 3,397.80 points to 237,404.92 points from 240,802.72 points, and the market capitalisation shrank by N2.179 trillion to N152.266 trillion from N154.445 trillion.
Africa Prudential dropped 10.00 per cent to trade at N11.70, Cadbury Nigeria lost 10.00 per cent to finish at N62.10, Tripple Gee crashed by 10.00 per cent to N3.60, John Holt depreciated by 9.93 per cent to N12.25, and McNichols stumbled by 9.33 per cent to N6.80.
On the other side, Legend Internet grew by 9.52 per cent to N5.75, NPF Microfinance Bank gained 9.18 per cent to settle at N5.35, Transcorp advanced by 7.32 per cent to N44.00, Neimeth improved by 7.03 per cent to N9.90, and DAAR Communications added 5.29 per cent to trade at N1.79.
Analysis of the price movement log indicated that the mood remained bearish, as Customs Street ended with 15 price gainers and 39 price losers, representing a negative market breadth index.
The activity level went up yesterday after investors bought and sold 691.6 million stocks worth N116.9 billion in 50,025 deals, in contrast to the 663.0 million stocks valued at N40.0 billion transacted in 51,143 deals on Wednesday. This showed that the trading volume increased by 4.31 per cent, the trading value surged by 192.25 per cent, and the number of deals decreased by 2.19 per cent.
First Holdco was the busiest equity during the trading day, with a turnover of 115.8 million units valued at N7.1 billion. Access Holdings traded 109.7 million units for N2.5 billion, Dangote Cement exchanged 71.5 million units for N83.4 billion, Japaul transacted 26.0 million units worth N83.6 million, and FCMB sold 25.9 million units valued at N285.9 million.
By Adedapo Adesanya
Oil prices rose on Thursday after American Vice President JD Vance warned Israel against further attacks on Iran-backed Hezbollah in Lebanon, raising doubts about the durability of the US-Iran ceasefire agreement.
Brent crude futures settled at $79.85 a barrel after chalking up 30 cents or 0.38 per cent, while the US West Texas Intermediate (WTI) crude futures gained 19 cents or 0.25 per cent to finish at $76.60 a barrel.
US Vice President JD Vance on Thursday issued an extraordinary rebuke to Israeli critics of the Iran deal, warning them not to alienate their “only powerful ally” left in the world.
The deal gives negotiators 60 days to reach an agreement on the status of Iran’s nuclear programme and set up a $300 billion reconstruction fund for Iran and other financial incentives.
Mr Vance told members of Israeli Prime Minister Benjamin Netanyahu’s cabinet to “wake up and smell the reality,” amid growing tensions between Netanyahu and US President Donald Trump.
Market analysts noted that the statements about Israel may have put things back on edge, as the two countries jointly launched the war on Iran on February 28.
Ultimately, oil markets will be focused on what happens in the Strait of Hormuz, through which 20 per cent of the world’s oil flowed before the start of the war.
Analysts expect a gradual recovery in flows through the Strait of Hormuz, while industry experts have cautioned that prices may not plummet as demand recovers and inventories are refilled.
Investment bank Goldman Sachs expects Gulf exports to normalise to pre-war levels by the end of July, with crude production recovering by October. The bank estimates that a normalisation in exports to pre-war levels might be achieved with a 13 million barrel-per-day increase in Hormuz flows from current levels to around 70 per cent of pre-war levels.
Markets will be watching closely in the coming week to see exactly how much oil begins to flow, especially Iranian oil, which will no longer be sanctioned thanks to the latest ceasefire agreement.
China, the world’s second-largest oil consumer, is forecast to consume 753 million metric tons of petrol in 2026, down 4.9 per cent from 2025 amid a pivot to new energy and high oil prices.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn