The National Economic Council (NEC) has approved the refinancing of the $3.3 billion Project Gazelle pre-export finance facility through a new $4.5 billion facility named ‘Project Gazelle 2’.
The approval is expected to enable the Nigerian National Petroleum Company (NNPC) Limited to refinance the outstanding balance of $1.5 billion under the original 2023 facility while unlocking an additional $3 billion in liquidity to strengthen the country’s external reserves and support the ongoing fiscal and infrastructure priorities of the government.
The decision was taken at the 159th NEC meeting held virtually on Monday. The approval followed a presentation by Taiwo Oyedele, minister of finance and coordinating minister of the economy, which was presented by Vice-President Kashim Shettima, chairman of the council. NEC observed the significance of unlocking additional liquidity to the federation, among other benefits, pledging its support for the actualisation of the initiative.
Speaking after the meeting, Oyedele said the refinancing has been structured on more favourable terms than the original facility. He said the volume of crude pledged under the facility has been reduced from 90,000 barrels per day (bpd) to about 78,750 bpd, representing a 12.5 percent reduction. The minister said under the new arrangement, an additional 11,250 bpd for the federation will be released, while there will be a reduction in the pledged crude volumes by the NNPC.
Oyedele said while accessing additional liquidity on improved terms, the arrangement is freeing up resources for strategic national priorities while strengthening the country’s financing structures.
In his remarks, Shettima called for a responsive, scalable, and data-driven social protection policy to tackle multidimensional poverty in Nigeria. According to the vice-president, government policies are reflected in citizens’ daily realities, including food prices, healthcare, education, family welfare, investor confidence, and “very importantly, the ambitions of state governments”.
He implored members of the council to ensure that every decision they make assures the citizens “that their government is paying attention to the pulse of the nation and is resolved to respond with competence, compassion, and purpose.”
The NNPC had, on August 16, 2023, secured a $3.3 billion emergency crude repayment loan — a transaction aimed at supporting the naira and stabilising the foreign exchange (FX) market.
Arranged by the African Export-Import Bank (Afreximbank), the $3.3 billion crude-for-cash loan was also targeted at supporting the federal government’s monetary and fiscal reforms.
Nigeria was expected to pay an interest of 11.85 percent per annum on the “pre-export finance facility” (PxF), according to the details of the transaction.