NNPC Gets Presidential Nod on $1.5 billion Loan

President Goodluck Jonathan has given his consent to the Nigerian National Petroleum Corporation (NNPC) to secure a $1.5 billion syndicated loan from Nigerian and international lenders led by Standard Chartered Bank Plc, to enable it to settle its huge indebtedness to foreign oil traders.

To support its decision to borrow, NNPC said the law establishing the corporation authorizes it to borrow in the exercise of its functions. Sections 6 (1)(c) and 8 (1)(2) of the NNPC Act states:  “The corporation, in fulfillment of its duties can enter into contracts or partnerships with any company, firm or person, which in the opinion of the corporation will facilitate the discharge of the said duties under this Act.

“Subject to the other provisions of this section, the corporation may from time to time borrow by overdraft or otherwise howsoever such sums as it may require in the exercise of its functions under this Act and the corporation shall not, without the approval of the National Council of Ministers, borrow any sum of money whereby the amount in aggregate outstanding on any loan or loans at any time exceeds such amount as is for the time being specified by the National Council of Ministers.”