The African Export-Import Bank, also known as Afreximbank has given the Nigerian National Petroleum Corporation (NNPC) financial assistance to the tune of $1.04 billion, in order to finance oil exploration.
The bank issued a statement on Wednesday, stating that the agreement was finalized in South Africa at the second Intra-Africa Trade Fair (IATF 2021), which kicked off on Monday. The statement stated that the transaction is made up of a Pre-Export/Shipment Finance Facility which is also further buttressed by a Forward Sale Agreement (FSA) and Offtake Contracts from the NNPC, acting as both the borrower and the seller.
The statement stated that within the FSA the NNPC will deliver about 35,000 barrels of crude oil per day. It also stated that the proceeds of the facility will help improve tax revenues and foreign currency receipts while creating thousands of jobs and job opportunities in the oil and gas refining value chain.
It also stated that it would be done by more than $2.4 billion which will immediately be to the benefit of the government, definitely improving the balance of trade and the Gross Domestic Product (GDP) in Nigeria.
Professor Benedict Oramah – who is the President of Afreximbank – linked the bank’s decision to the world’s agenda for climate change, stating that there was a situation that required taking a balanced approach. The Professor stated that he believed that Africa was more of a victim than perpetrator of the discharge of highly harmful greenhouse gases, contributing a mere four percent to the entire scale.
He then added that halting the development of some parts of Africa only to attain a clean environment later in the future is ”utterly foolhardy.”
The statement added that the transaction went in line with Afreximbank’s directive to encourage local content in the African oil and gas industry, while generating foreign receivables into the continent.
The deal was signed by Umor Ajia, the Executive Director and the Group Chief Executive Officer of NNPC, on behalf of the Corporation.