Afrexim Bank is tapping oil traders to finance a $3 billion loan to Nigeria's state oil company that is central to the country's efforts to support the naira, three sources told Reuters.
The currency hit an all-time low of 1,000 to the dollar on
the black market on Tuesday.
Afrexim approached traders in recent weeks seeking their
interest in funding the oil-backed loan to state oil company NNPC LTD, the
sources said. It is working to craft terms to offer to the trading houses.
"There is a lot of interest, but they need to see
terms," one oil executive close to the talks told Reuters. The executive,
who could not be named because he was not authorised to speak publicly on the
issue, added that oil prices climbing past $90 per barrel would help drive
interest.
An NNPC spokesman did not respond to a request for comment.
Afrexim did not immediately comment.
During his confirmation hearing on Tuesday, incoming central
bank chief Olayemi Cardoso said clearing unsettled foreign exchange obligations
to local lenders, which could be as high as $7 billion, was his top priority.
The backlog is limiting the availability of dollars on the
official market, forcing businesses and individuals to seek them on the black
market.
Traders who put up cash would be repaid in physical cargoes
of oil. The bank is working to determine how much oil to offer those traders in
exchange for the financing, one of the sources said.
Shortly after taking office in May, President Bola Tinubu
announced long-sought reforms that allowed the official naira rate to fall
versus the dollar and fuel prices to roughly triple. In June, the naira was
close to the black market level, but the gap has widened.
Tinubu also allowed pump prices to more than triple, which
cut fuel smuggling and relieved pressure on state oil company NNPC to import
petrol.
But NNPC is still using oil cargoes to repay some of the oil
trading firms that had contracts to supply gasoline in exchange for crude,
limiting its immediate access to oil.