Laolu Akande, situated in New York, Empowered Newswire has exclusively disclosed that AFREXIM, not being a depositors’ bank, is unable to independently secure the $3 billion loan it had agreed to provide to NNPC Ltd in August.
This $3 billion is not only earmarked to support NNPCL but also to bolster foreign exchange liquidity, as a strategic move to stabilize the Naira in the FX market.
This idea was conceived just as the Tinubu administration terminated the Dual Foreign Exchange policy two months ago to clean up the FX market.
Sources reveal that AFREXIM can only raise $500 million on its own, leading the financial institution to seek a loan from various global banks in the US, Singapore, India, and other parts of the world.
Reliable sources within New York’s financial circles have confirmed that AFREXIM’s staff and agents have been actively exploring options to secure funds and financial instruments in the US. They have been in discussions with top-tier American banks such as JP Morgan Chase and Citigroup, among others.
One member of the Board of a bank, who wished to remain anonymous, expressed concerns about Nigeria using a third-party non-deposit financial institution and broker, raising questions about credibility.
He suggested that Nigeria has highly capable executives, including Mr. Bayo Ogunlesi and Mr. Jide Zeitlin in New York, who could provide a more credible and cost-effective means of raising the funds.
Bayo Ogunlesi, an investment banker, currently serves as the chairman and managing partner at the private equity firm Global Infrastructure Partners (GIP), while Jide Zeitlin was the immediate past CEO of Tapestry, the parent company of luxury brands like Coach, Kate Spade, and Stuart Weitzman.
Beyond New York, there is Kase Lawal, a prominent oil business figure based in Texas, who also chairs the Unity National Bank of Texas.
In addition to exploring funds from US banks, AFREXIM is reportedly seeking financial support from international oil traders. However, industry observers in the US are concerned that engaging a broker instead of a deposit bank may increase the level of risk associated with the loan, as AFREXIM would have its own charges in addition to those of potential financiers.
Back in August, the Nigerian National Petroleum Corporation Ltd (NNPCL) had announced securing an emergency $3 billion loan from Afreximbank to enhance its services across the entire petroleum value chain.
The loan would be repaid using a portion of future crude oil production, facilitating the settlement of taxes and royalties in advance, while also supporting the Nigerian government in stabilizing the local currency against major global currencies.
A stronger Naira resulting from this initiative would lead to a reduction in fuel costs, as an appreciating Naira would lower fuel prices, thus curbing further increases.
Afreximbank, as a development bank, boasts a diverse shareholder base comprising African governments, central banks, regional and sub-regional institutions, private investors, financial institutions, and non-African financial institutions, including export credit agencies and private investors.
The bank provides loans, guarantees, letters of credit, and advisory services to sovereigns and private-sector entities and extends countercyclical loans to member states to address the economic impact of external shocks.
Operating in 52 African countries, it has a profit-driven business model primarily focused on trade finance, with most of its loans having short maturities and a self-liquidating nature.
