Talks on a record US $5 billion crude-for-cash facility between Nigeria and Saudi oil major Aramco have slowed as lenders question whether Africa’s top producer can guarantee the barrels needed to secure the deal.
President Bola Tinubu first floated the loan in November 2024 during a meeting with Crown Prince Mohammed bin Salman at the Saudi-African Summit in Riyadh. The agreement would be Aramco’s largest financial foray into West Africa and a centre-piece of Tinubu’s plan to raise US $21.5 billion in external financing for the 2025 budget.
Under draft terms, Nigeria must pledge at least 100,000 barrels of crude per day over the life of the facility. But output remains well below target: April production slipped to 1.486 million bpd, far short of the 2 million bpd benchmark underpinning the budget.
Years of theft, pipeline sabotage and under-investment have already diverted some 300,000 bpd to service earlier oil-backed loans. With Brent crude down nearly 20 % since January to about US $65, Nigeria would need to ship even more barrels to cover the same dollar value, magnifying lenders’ concerns.
“There’s a credibility gap—you can’t structure a deal of this size without firm month-on-month delivery guarantees,” one banker involved in the negotiations told Reuters. Gulf banks and at least one African lender have signalled they are unwilling to underwrite the facility without stronger assurances.
Trading firm Oando is slated to handle physical offtake, while the Nigerian National Petroleum Company (NNPC) would allocate cargoes, according to people familiar with the talks. All parties declined to comment.
Tinubu last month issued an executive order cutting upstream operating costs in a bid to boost output, yet analysts say the measures cannot close the immediate supply gap. Unless production stabilises, negotiators may scale back or shelve the Aramco package entirely, leaving Nigeria to seek alternative—and likely costlier—funding for its widening fiscal deficit.
