Former Vice President, Atiku Abubakar, has asked President Bola Tinubu to explain the $3.3 billion emergency oil loan from the Nigeria National Petroleum Company Limited (NNPCL).
On August 16 last year, NNPCL had said it would raise a $3.3 billion loan to support the naira and stabilize the foreign exchange market.
Atiku, in a statement he personally signed on Thursday in Abuja, said the curious thing about the transaction is that the federal government has not spoken about it.
He said the only information available to the public about the transaction comes from unofficial sources of the NNPCL.
“In what appears to be a historic economic decision by the Bola Tinubu-led administration, last year, precisely on August 16, 2023, the federal government, through the Nigerian National Petroleum Company (NNPC), obtained a emergency loan for the payment of crude oil worth $3.3 billion, which the NNPC said was to help support the Naira and stabilize the foreign exchange market.
“The curious thing about this transaction is that until now, the federal government continues to remain silent about it, and the only information available to the public about the mega deal comes only from unofficial sources of the NNPC,” he said.
Atiku, who was a candidate for the opposition People’s Democratic Party (PDP) in the 2023 presidential election, said the most confusing thing about the deal was that the federal government would register a company in the Bahamas despite the recent Paradise Papers scandal involving the country.
“What is even more confusing about this agreement is why the Federal Government would register a company in the Bahamas, knowing full well the recent Paradise Papers scandal involving that country,” he said.
He noted that “it is inconceivable that the federal government would lead the country to take out a loan of $3.3 billion with an interest rate that does not exceed 12 percent but with an estimated repayment that amounts to $12 billion.”
Atiku said there are questions to be answered about the integrity of the agreement and called on the government to provide them.
He said: “We therefore demand, on behalf of the ordinary people of Nigeria, that the Federal Government provide answers to the following questions.
1. Has the Federal Government agreed to the loan?2. Is the loan in the government’s debt plan approved by the National Assembly?3. Who are the parties to the loan and what specific functions are they expected to perform?4. What are the terms of the loan, including the term, payment terms, collateral and interest rate?5. And finally, why register an SPV in the Bahamas knowing the recent scandal of the country’s notoriety for storing impure assets?
Read Atiku’s full statement
Tinubu administration owes Nigerians an explanation on NNPC’s $3.3 billion emergency loan
In what appears to be a historic economic decision by the Bola Tinubu-led administration, last year the Federal Government, precisely on August 16, 2023, through the Nigerian National Petroleum Company (NNPC), obtained a loan of emergency payment for crude oil worth $3.3 billion, which the NNPC said was to help support the Naira and stabilize the foreign exchange market.
The curious thing about this transaction is that until now, the Federal Government continues to remain silent about it, and the only information available to the public about the mega deal comes only from unofficial sources of the NNPC.
The deal is supposed to be a crude-for-cash loan arranged by the African Export-Import Bank.
According to available information, a special purpose vehicle called Project Gazelle Funding Limited is driving the deal and was incorporated in the Bahamas.
The SPV is the borrower, while the NNPC is the sponsor, with an agreement to pay crude oil to the SPV to settle the loan at an interest rate of just over 12 percent.
What is even more confusing about this deal is why the Federal Government would register a company in the Bahamas, knowing full well the recent Paradise Papers scandal involving that country.
Interestingly too, Nigeria’s current Barrels Daily Production (BPD) is 1.38 million and under the Project Gazelle agreement, Nigeria will supply 90,000 barrels of its daily production, starting in 2024, rising to 164.25 million of barrels for loan repayment.
Now this is where the details get disturbing because Nigeria’s benchmark for crude oil sales per barrel in 2024 is $77.96. A simple multiplication of that figure by 164.25 will give us a whopping $12 billion.
In this sense, we ask the federal government to rule on this murky agreement.
It is inconceivable that the Federal Government would lead the country to take out a $3.3 billion loan with an interest rate that does not exceed 12 percent, but with an estimated repayment that amounts to $12 billion.
This is a huge gap of about $7 billion between what is in the details of the agreement on paper and what is actually reality.
There are questions to be answered about the integrity of this agreement, and we sincerely ask the Federal Government to speak directly to these confusing details behind the agreement.
We therefore demand, on behalf of the common people of Nigeria, that the Federal Government provide answers to the following questions.
1. Has the Federal Government agreed to the loan?2. Is the loan in the government’s debt plan approved by the National Assembly?3. Who are the parties to the loan and what specific functions are they expected to perform?4. What are the terms of the loan, including the term, payment terms, collateral and interest rate?5. And finally, why register an SPV in the Bahamas knowing the recent scandal of the country’s notoriety for storing impure assets?
Signed: Atiku AbubakarVice President of Nigeria, 1999-2007January 25, 2024.