Project Gazelle 2: Nigeria Approves US$4.5 Billion Oil-Backed Refinancing

NIGERIA · ECONOMY

Nigeria has approved Project Gazelle 2, a US$4.5 billion oil-backed refinancing that replaces the country’s 2023 facility, frees up roughly US$3 billion in fresh liquidity and cuts the crude pledged to lenders by 12.5 per cent.

What Project Gazelle 2 changes

The National Economic Council signed off on the new facility at its 159th meeting on Monday, held virtually and chaired by Vice-President Kashim Shettima. The decision refinances the US$3.3 billion Project Gazelle Pre-Export Finance Facility that Nigeria arranged in 2023, according to Premium Times.

Under the new structure, NNPC Limited refinances the roughly US$1.5 billion still outstanding on the original deal. The larger US$4.5 billion envelope then unlocks about US$3 billion in additional liquidity for the federation.

Finance Minister Taiwo Oyedele, who briefed reporters after the meeting, said the money would bolster Nigeria’s external reserves and support the government’s fiscal and infrastructure priorities. The council formally pledged its support for the initiative.

Why Abuja needs the liquidity

Pre-export finance lets a producer borrow against future crude sales, delivering dollars today against barrels tomorrow. For Africa’s biggest oil producer, it is one of the fastest ways to raise hard currency without a Eurobond roadshow.

Nigeria’s gross external reserves passed US$51 billion in June, their highest level in 17 years, and Abuja is keen to protect that cushion. A bigger reserves buffer steadies the naira and reassures foreign investors who have only recently returned to Nigerian assets.

The timing also matters for the budget. The federal government is juggling infrastructure promises with a heavy debt-service bill, and cheaper liquidity now reduces the pressure to borrow on worse terms later.

The fine print on pledged crude

The most telling detail in Oyedele’s briefing was the collateral. The volume of crude pledged under the facility drops from 90,000 barrels per day to about 78,750 barrels per day, a 12.5 per cent reduction.

That frees an extra 11,250 barrels per day for the federation at a moment when every incremental barrel counts. It also signals that lenders were prepared to improve terms rather than simply roll the old debt forward.

NNPC’s own finances remain part of the backdrop. The state company reported a 35 per cent fall in first-half profit to about US$1.7 billion, as The Rio Times reported on Tuesday, so a structure that lightens its pledged-barrel load has a logic of its own.

The politics of borrowing against oil

Not everyone is applauding. Opposition figures, led by former vice-president Atiku Abubakar, have stepped up attacks on the government’s reliance on borrowing, arguing that rising debt is squeezing the economy and deepening poverty, as BBC Hausa reported on Tuesday.

The government’s counter-argument is that Project Gazelle 2 is a refinement, not a fresh binge: better pricing, fewer pledged barrels and a longer runway for reforms to deliver revenue. How markets judge that distinction will show up first in the naira and in the reserves data.

For readers following the wider contest for Africa’s energy and finance, the deal is another move in the game we track in our Africa: The New Scramble pillar and across the West Africa hub. Nigeria is using its oil to buy time; the question is what it builds with the time it buys.

What to watch

The first marker is implementation. The facility must now be documented, syndicated and disbursed, and the pace of that process will show how quickly the new liquidity actually reaches the reserves.

The second is the crude market itself. Project Gazelle 2 assumes Nigerian barrels keep flowing at workable prices, so any disruption in the Niger Delta or a fresh slide in oil would tighten the arithmetic behind the deal.

The third is the political calendar. With opposition leaders making debt a defining theme, every new borrowing announcement will face louder scrutiny, and the government will need visible wins from the liquidity it has just unlocked.

Finally, watch the pledged-barrel metric. If NNPC can hold the pledge at 78,750 barrels per day while raising output, the freed 11,250 barrels a day become a quiet but real fiscal gain.

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