Finance Ministry dismisses reports of $5bn oil-backed loan collapse
BY MOTOLANI OSENI
The Federal Ministry of Finance has categorically rejected media reports suggesting that Nigeria’s proposed $5 billion oil-backed loan deal with Saudi oil giant Aramco has collapsed.
In a statement on Wednesday, Mr Mohammed Manga, Director of Information and Public Relations at the ministry, described the reports as unfounded and misleading. He stressed that the Federal Government has not made any final decision on the transaction and that no official announcement has been made to that effect.
Recent media publications had claimed that the forward sale arrangement had faltered due to a combination of falling global crude oil prices and growing doubts about Nigeria’s capacity to meet its crude supply obligations. However, the ministry firmly dismissed these claims as baseless speculation.
“The Federal Government of Nigeria is aware of recent media reports concerning a potential forward sale of crude oil involving the Nigerian National Petroleum Company Limited (NNPC Ltd). While market speculation is not uncommon, no final decision has been announced by the government, and commentary suggesting the collapse of any such initiative is unfounded,” the statement read.
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The proposed oil-backed loan, if concluded, would mark Nigeria’s largest facility of its kind and represent Aramco’s first major financing deal in the country. The arrangement is intended to strengthen Nigeria’s external reserves, boost foreign exchange inflows, and support macroeconomic reforms currently underway.
Negotiations, however, have reportedly slowed as lenders assess the risks posed by declining oil prices and production uncertainties. Industry sources had earlier indicated that falling crude prices, coupled with questions over Nigeria’s ability to meet its daily supply commitments, have made some financial institutions hesitant.
The Finance Ministry reaffirmed that all financing options under consideration are being carefully evaluated with strict adherence to principles of fiscal responsibility, transparency, and long-term economic stability.
“The government remains focused on deploying a range of innovative, transparent, and fiscally responsible financing strategies to optimise Nigeria’s oil assets, improve external liquidity, and strengthen macroeconomic stability,” the ministry stated.
Meanwhile, Nigeria recently concluded the final $1.05 billion disbursement of a $3.3 billion oil-backed loan from Afreximbank in April 2024. Under that arrangement, Nigeria is repaying the facility with 90,000 barrels of crude oil per day at a benchmark price of $65 per barrel, a deal aimed at easing dollar shortages and bolstering the country’s foreign exchange reserves.
The Federal Government emphasised that all ongoing financing discussions remain guided by the nation’s economic reform agenda, with a focus on preserving fiscal sustainability, enhancing investor confidence, and supporting national development goals.
