In a bid to counter the persistent fluctuations in the value of the naira, the National Economic Council (NEC) announced on Thursday that the $3 billion emergency loan secured by the Federal Government in August would be utilized. The loan, obtained for crude oil, is intended to stabilize the Nigerian currency, which has experienced volatility in both the Investors & Exporters’ window and the parallel market, reaching N1000/$ earlier this month.
Nasarawa State Governor Abdullahi Sule, addressing reporters after the 136th NEC meeting at the Aso Rock Presidential Villa, expressed confidence in the effectiveness of the loan. He 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 emergency loan, secured on August 16, was revealed by the Nigerian National Petroleum Company Limited, specifying its purpose to relieve pressure on the naira by settling taxes and royalties in advance.
The naira experienced a rebound on September 22, 2023, after President Bola Tinubu nominated Olayemi Cardoso as the CBN governor. The currency gained N10 against the dollar in the black market, closing at N990/$1.
When questioned about the timeline for the intervention and the possibility of a supplementary budget, Governor Sule explained, “The $3 billion that was taken in order to stabilize the naira… it is one thing to take the loan, it is another to plan the process of stabilization because it’s going to take a while.” He emphasized that the new CBN governor, recently confirmed, needs time to outline the modalities.
Regarding the potential need for a supplementary budget, Governor Sule stated, “A supplementary budget is a request that will come as a result of whatever is happening right now. I’m not sure there is a need for a supplementary budget immediately. So far, there have been no supplementary budget requests that were presented to NEC.”
This move aims to equip the Federal Government with the necessary dollar liquidity to stabilize the naira, minimizing associated risks. Despite these efforts, the naira continues to experience fluctuations, both in the Investors & Exporters’ window and the parallel market, with a recent low of N1000/$.