Nigeria will have an additional 11,250 barrels of crude oil available for federation sales each day after the National Economic Council (NEC) on Monday approved the refinancing of the 2023 Project Gazelle loan with a new $4.5 billion facility.
The decision, taken at the Council’s 159th virtual meeting chaired by Vice President Kashim Shettima, cuts the volume of crude pledged for the financing arrangement, refinances about $1.5 billion still outstanding under the original loan and unlocks another $3 billion to support external reserves, fiscal obligations and infrastructure projects.
The revised financing package changes how much crude oil is committed to the facility without ending the programme.
It gives the federation more oil to sell outside the agreement and leaves the country with additional dollar liquidity under improved lending terms.
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Project Gazelle began in 2023 as a pre export finance facility backed by future crude oil sales. It was introduced to provide dollar liquidity, support the naira and help stabilise the foreign exchange market after the unification of exchange rate windows.
The new package extends that arrangement following three years of oil sector reforms intended to attract investment from international oil companies and improve domestic production capacity.
Refinancing reduces crude commitment
The approval followed a presentation by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on the value of the refinancing arrangement.
Under Project Gazelle 2, NNPC Limited will refinance the outstanding balance of about $1.5 billion under the original $3.3 billion facility. The new package also unlocks an extra $3 billion in liquidity for Nigeria’s external reserves and government spending priorities.
Senior Special Assistant to the President on Media and Communications in the Office of the Vice President, Stanley Nkwocha, announced the Council’s decision in a Monday statement titled “NEC Approves Refinancing of $3.3bn Project Gazelle to Optimise Cost, Unlock Additional Liquidity.”
Nkwocha said Council recognised the importance of making more liquidity available to the federation and backed the implementation of the initiative.
After the meeting, Oyedele told journalists that the refinancing gives Nigeria more favourable conditions than the original agreement, including a lower crude oil commitment.
He said, “The refinancing has been structured on more favourable terms than the original facility, including a reduction in the volume of pledged crude oil from 90,000 barrels of oil per day to approximately 78,750 barrels of oil per day, a 12.5 per cent reduction.”
The minister said the reduction allows the federation to retain more crude outside the financing arrangement.
“Under the new arrangement, an additional 11,250 barrels of oil per day for the federation will be released, while there will be a reduction in the pledged crude volumes by NNPC Limited,” he said.
Oyedele also said the package gives the country access to more liquidity and improves its financing structure.
Council discusses social protection
Before deliberations on the refinancing proposal, Vice President Shettima spoke on the need for a responsive, scalable and data driven social protection policy to tackle multidimensional poverty.
He told Council that government decisions affect everyday life through food prices, hospital services, school records, family welfare, investor confidence and the aspirations of state governments.
Shettima said, “Government policies are often heard before they are seen they speak through the price of food, the condition of hospitals, the records in schools, the strain on families, the confidence of those who invest their labour in the nation’s future, and, very importantly, the ambitions of state governments.”
He also told Council members that every decision should leave citizens with confidence that government is responding to their daily needs.
The Vice President said, “Every decision we make must assure the citizens that their government is paying attention to the pulse of the nation and is resolved to respond with competence, compassion and purpose.”
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