Governor Monday Okpebholo of Edo State has received the backing of the State House of Assembly to engage the services of a debt recovery consultant.
The House passed the resolution during plenary on Thursday, following a letter by the Governor, addressed to the Speaker of the House, Blessing Agbebaku.
The purpose was for the House to grant the government’s request to join other states in Nigeria to review, reconcile and recover amount due from the Federal Government of Nigeria in respect of the Gazelle project.
The letter dated February 18, 2025, and titled: ‘Request for the provision of consultancy service to review, reconcile and establish recoverable amounts due to Edo State Government from project Gazelle Afrexim loan and any other crude oil loan arrangements’, was signed by the Secretary to the State Government, Umar Musa Ikhilor.
The letter read: “May I respectfully inform Mr, Speaker that the Federal Government of Nigeria needed Forex to settle her Foreign Exchange Obligations of over $7 billion of which the NNPC Ltd arranged $3.3 billion emergency loan from Afrix Eximbank (AFEX) on behalf of Federal Government of Nigeria with a code name given as project Gazelle. The facility was needed to enhance Nigeria’s macro-economic stability and long term economic growth.
“May, I also inform Mr. Speaker that the project Gazelle as stated above is a crude oil backed, forward sale structured finance facility sponsored by NNPC Ltd, which acts as the seller and sponsor. The NNPC in this transaction promises to repay AFEX with crude oil, equivalent to the principal borrowed plus interest element of 11.85 % annual percentage yield.
“Mr, Speaker, may also wish to know that this borrowing by NNPC from AFEX is backed by its future sales of crude oil and as a collateral, Nigeria will deliver to AFEX 90,000 barrels of crude oil per day from 2024 until 2029.
“May also inform, Mr. Speaker that in the light of the cash flow requirement of Edo State Government, it becomes necessary and desirable that shortfall payment due to states, as a result of this, will have to be comprehensively monitored so that the amount due to Edo State Government are received on a timely basis.
“May, I inform the Honourable Speaker that at the meetings of the Executive Council of the State duly convened and held on February 12, 2025, the following resolutions were proposed and duly passed as approvals of the Council.
“Approved the need for Edo State to join other states of the Federation to review, reconcile and recover the amount due to Edo State Government from Gazelle AFREXIM loan and any other crude oil loan arrangement and the deduction at source of 10 % as professional fee.”
