An economist, Dr Chijioke Ekechukwu, has lauded the emergency three billion dollars crude oil repayment loan secured by the National Petroleum Company Ltd. (NNPC Ltd) from Afreximbank to stabilise exchange rate. Ekechukwu said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja. He said the loan came as a matter of expediency to save the continuous free fall of the Naira in the shortest run. The economist said there was no other measure or monetary/fiscal policy decision that would have been able to save the depreciation of the Naira in such a short period of time.
“It is, therefore, a very necessary intervention while working out other medium to long-term remedial solutions to the Naira fall. The intervention is inevitable because that’s the only way we can wriggle out of the economic embarrassment we find ourselves now as a result of the very high exchange rate,” he said. However, he advised the three tiers of government to desist from extravagant cost of governance. According to him, all is not economically well, so we need to adjust our expenditure pattern and total cost of governance. The Naira float had seen the currency plunge from below N500 per dollar on the official exchange windows to a record low of about N900 Naira.
Petrol now sells at N617 from the first increment of N540 per litre since May 29, when President Bola Tinubu announced that fuel subsidy was gone. NNPC Ltd. and Afreximbank had recently signed a commitment letter and term sheet for an emergency three billion dollars crude oil repayment loan. The deal, according to NNPC Ltd., will provide immediate disbursement to enable the NNPC Ltd to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market. It will cushion the effect of fuel price jump and scarcity of forex, associated with the free float of the Naira.
