• Nigeria’s $5 billion loan from Saudi Aramco stalls due to falling oil prices
• Deal tied to 100,000 barrels per day faces risk amid production constraints
• Lenders demand stronger guarantees; Nigeria eyes alternate borrowing routes
Nigeria is seeking new options to raise funding for its national budget, including a $5 billion loan agreement with Saudi Aramco, the Saudi state-owned oil company. The arrangement, initiated in 2023, was structured around projected daily oil deliveries of 100,000 barrels.
The loan was intended to strengthen Nigeria’s foreign exchange reserves and provide budgetary support, especially in key economic sectors. However, declining oil prices and ongoing structural production issues in Nigeria have slowed progress.
Brent crude, the global oil benchmark, has dropped to about $68 per barrel in recent months. This represents an 18% decline from the $80 benchmark used during the loan's initial financial projections. As a result, the deal now appears riskier for potential lenders.
Nigeria continues to struggle with sustaining oil production beyond 1.5 million barrels per day, due to various technical and logistical challenges. Nearly 300,000 barrels per day are already tied to other financial commitments, further limiting the country’s leverage in negotiating this deal.
Banks, particularly those in the Gulf and across Africa, are reportedly cautious. “It is tough to find an institution willing to commit without solid guarantees on volumes,” said a banking source involved in the talks. The viability of the loan now hinges on either Nigeria securing better market conditions or lenders adjusting their expectations in light of current risks.
Meanwhile, the Nigerian government is also reviewing a broader external borrowing plan worth $24.14 billion. This proposal, submitted by President Bola Tinubu in May 2025, is still awaiting parliamentary approval.
The fintech leaders primarily emerge from Nigeria, Egypt, Kenya, and South Africa, nations recognize...
By linking ECOWAS countries, the project enhances regional digital infrastructure, which is crucial ...
As digital technologies reshape Africa's job market, digital skills are becoming crucial for youth i...
Non-bank institutional investors, though still a minority, are increasing their presence in the West...
Highlights: • $20 billion in investment pledged by Chinese firms for agriculture, mining, auto...
• Glo launched a network upgrade plan after a 50% telecom tariff hike.• It aims to add 1,000+ 4G sites and adopt hybrid energy solutions.• With 20.6M...
• Mali seeks $176M via WAEMU bond offering launched July 28, with 7- and 5-year tranches at 6.55% and 6.35%.• Funds aim to ease fiscal pressure amid...
• September 2008 laws already set $185-$340 axle tax on trucks >3.5t, but never applied.• Kongo Central was picked first because Matadi port...
• Kenya plans tea export deal with Algeria, discussed at UN summit.• Part of effort to diversify markets beyond top 10 buyers.• Algeria's tea market is...
Garamba National Park, located in the northeastern Democratic Republic of Congo, is one of Africa’s oldest and most iconic protected areas. Established in...
Perched in the rugged heights of the Djebel Nefoussa in northwestern Libya, Qasr Al Haji (also spelled Ghasr Al-Hajj) is a striking example of traditional...