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Nigeria Receives $925 Million Loan Boost as Naira Weakens

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The naira has weakened against the dollar and now exchanges 1,500 naira against one USD.

This weakness is visible in both official and unofficial markets in Nigeria, where people freely buy and sell currencies.

Amid this challenge, Nigeria has received a $925 million loan boost from Afrieximbank.

The Federal Government aims to strengthen the country’s forex reserves and help it pay debt obligations in US dollars.

However, the naira’s weakness is attributed to insufficiency in Nigeria’s foreign currency reserves.

There have been difficulties for weeks now due to this insufficiency.

However, the Central Bank of Nigeria tried to reconcile by making some moves to strengthen the naira.

The rate was best at around 1,100 NGN/USD in early April.

Nevertheless, there has been an imbalance as the demand for forex among Nigerians exceeds the amount of USD available for transactions.

This has resulted in a continuous fall of the naira relative to the USD.

On Wednesday, the country received good news as its currency traded at approximately N1,481 per dollar.

The African Export-Import Bank (Afreximbank) gave Nigeria a $925m loan.

Notably, this loan is part of the larger Afrexibank $3.3bn deal to support Nigeria.

The money will help pay government debt in dollars and finance the Nigerian National Petroleum Corporation (NNPC).

The Afreximbank Loan to Nigeria Highlights Its Support for African Economy

Afreximbank played a great role in enabling this loan by creating an array of financiers.

Project Gazelle Funding, as it was called, raised 3.175 billion dollars.

Lenders include Nigerian oil-buying companies, such as Oando and Sahara Energy.

Nigeria wants to use the loan to boost its economy, contributing to national economic stability and long-term economic development.

Moreover, credit can facilitate trade between Nigerian industries or businesses and other countries so that they can cope with difficulties.

Dr. Benedict Oramah, Afreximbank Chairman, commented on this loan.

He pointed out that this additional investment confirms how the bank has become crucial in assisting African states’ development endeavors.

Alternatively, Dr. Oramah sees this loan as an example of how they fulfill their purpose of aiding African nations.

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