• Friday, December 01, 2023
businessday logo


How Nigeria plans to source $10bn to fix FX crisis

Tinubu pleads with labour

The Nigerian government is planning to raise $10 billion to address the country’s foreign exchange crisis that has sent the naira tumbling on both the official and parallel markets, worsening a cost-of-living crisis for businesses and households in Africa’s most populous nation.

BusinessDay’s findings showed the $10 billion is expected to be sourced from two tranches of forward sales by the Nigerian National Petroleum Company Limited (NNPC) which could yield $7 billion while the additional balance is expected from Qatar, which will provide a soft credit without strings

Read also: AfDB, African Guarantee Fund to provide $5bn loans for female entrepreneurs

Naira slumps further

Nigeria has faced chronic dollar shortages after foreign investors exited local assets during a period of low oil prices.

Investors are yet to return and the CBN has not settled outstanding demand for dollars from foreign investors seeking to repatriate funds or airlines seeking to send money from ticket sales abroad.

Read also: Naira is in a mindless race to N2000/$ but who can stop it?

As a result of the shortages, some businesses and individuals have turned to the black market, where the naira has hit record lows, widening the gap with the official rate.

“There is a line of sight on $10 billion worth of inflow of foreign exchange in a relatively near future, in weeks rather than months,” Wale Edun, minister of finance, said on Monday, adding that President Bola Tinubu on Thursday signed two executive orders to allow domestic issuance of instruments in foreign currency and also allow all cash outside the banking system to be brought into the banks.