Nigeria’s $5 Billion Aramco Loan Faces Delay

Nigeria’s long-planned $5 billion oil-backed loan from Saudi Aramco has been delayed due to recent drops in Brent crude prices—from $82 earlier this year to around $65 today.

The arrangement, Nigeria’s largest-ever and the first of its kind with Aramco, was part of a broader strategy to secure $21.5 billion in foreign financing for its 2025 budget. The lower oil pricing forces the country to pledge more barrels to collateral, causing concern among participating banks.

Nigeria currently dedicates 300,000 barrels per day to repay existing debt, and the new loan would require an additional 100,000 bpd—spiking worries about its ability to secure enough volume amid underproduction. Nigeria’s output is struggling: at under 1.5 million bpd versus the hoped-for 2 million bpd benchmark—hampered by pipeline theft, underinvestment, and ongoing repayment obligations. T

hese challenges make lenders uneasy about collateral risks, pushing back the loan completion. The government has responded by launching initiatives to boost daily production and reduce operational inefficiencies. It’s negotiating with Gulf and African banking institutions to structure loan terms that will ensure repayment even in low-price scenarios. This delay matters.

Nigeria urgently needs the funds to support its budget, but oil volatility remains a major obstacle. Resolving these issues quickly will be critical to avoid further fiscal disruption.