The National Economic Council (NEC) has officially announced its commitment to utilize the $3 billion emergency loan secured by the Federal Government in August to restore stability to the Nigerian naira. The currency has been facing significant fluctuations, especially in the Investors & Exporters’ (I&E) window, and its value deteriorated further in the parallel market, reaching an alarming exchange rate of N1000 per US dollar earlier this month.
Nasarawa State Governor, Abdullahi Sule, made this declaration while addressing State House correspondents following the conclusion of the 136th NEC meeting held at the Aso Rock Presidential Villa in Abuja. He expressed confidence in the forthcoming plan aimed at enhancing revenue and stated, “So, we are very confident and we still believe very strongly that with the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”
The loan, initially disclosed on August 16 by the Nigerian National Petroleum Company Limited, was secured from the African Export-Import Bank (Afrexim Bank) to alleviate pressure on the naira. It is intended to facilitate the prepayment of taxes and royalties, ensuring the Federal Government has the necessary dollar liquidity to stabilize the currency while keeping risks at a minimum.
Despite the loan’s announcement, the naira continued to experience volatility, particularly in the I&E window, and its situation worsened in the parallel market, where it reached the N1000/$ mark just a few weeks ago.
A significant turning point occurred on Friday, September 22, 2023, when President Bola Tinubu nominated Olayemi Cardoso as the Central Bank of Nigeria (CBN) governor. Subsequently, the naira saw an upswing of N10 against the dollar in the black market, closing at N990/$1.
Regarding the timing of the intervention and the possibility of a supplementary budget, Governor Sule explained, “The $3 billion that was taken [is] in order to stabilize 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 work out the modalities. It is one thing to take the loan; it is another to plan the process of stabilization because it’s going to take a while. The CBN governor was just confirmed a few days back, and he started rolling out his plans of what to do.”
Governor Sule also addressed the question of a supplementary budget, stating, “Supplementary budget is a request that will come as a result of whatever is happening right now. I’m not sure there is a need for a supplementary budget immediately. So far, there have been no supplementary budget requests that were presented to NEC.”
The NEC’s commitment to utilizing the $3 billion loan for naira stabilization reflects the government’s determination to address the ongoing currency challenges and ensure economic stability in Nigeria.