Prof. Aruwa on Gazelle 2 Funds and the Imperative of Transparency
In the latest edition of the Public Finance Policy Reviews, Prof. Suleiman Aruwa released a detailed analysis of fiscal strategy in Nigeria, focusing on refinancing of the Project Gazelle facility.
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At its 159th meeting, the National Economic Council approved the refinancing of US$3.3 billion Project Gazelle Pre-Export Finance Facility. The approval came with a new US$4.5 billion Project Gazelle 2 facility. According to Guardian newspaper, this transaction refinances US$1.5 billion balance of original deal while unlocking US$3 billion in new liquidity. Importantly, crude oil pledged as collateral has been reduced from 90,000 barrels per day to 78,750. This adjustment releases 11,250 barrels for the Federation.
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Prof. Aruwa noted that while this reflects liability management rather than fresh borrowing, it also deepens reliance on resource-backed financing in Nigeria.
“Public borrowing, irrespective of its form, represents a commitment against future national income. Every dollar borrowed today must eventually be repaid from tomorrow’s revenues,” he wrote.
The public finance expert emphasised that the success of Project Gazelle 2 will depend not on the amount raised but on how transparently the funds are managed and how productively they are invested:
“Borrowing should be viewed as an investment instrument rather than a mechanism for financing routine government operations.”
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Adding perspective, AbdulRasheed Hussain, a Nigerian policy analyst, told Legit.ng that while the refinancing appears strategic on paper, risks remain:
“Project Gazelle 2 looks like a clever refinancing move on paper, but it raises concerns. Nigeria is essentially taking on more debt while claiming to reduce costs which risks becoming a cycle of borrowing rather than true fiscal reform. The reliance on crude oil pledges still ties national finances to volatile markets. Also, the lack of transparency on interest rates and repayment terms makes it hard to judge the real benefit. ”
Prof. Aruwa recommended that the additional liquidity should be directed towards high-impact infrastructure such as electricity, transport, healthcare, education, agriculture and digital systems. These sectors, he noted, have the greatest potential to expand productive capacity in Nigeria, create jobs and strengthen future debt-servicing ability.
Transparency is equally vital. The public finance scholar urged full disclosure of financing terms, repayment schedules and utilisation of proceeds, alongside quarterly public reports and independent oversight.
The PFPR series is designed to promote accountability and the sustainable management of public finances with the ultimate goal of supporting national development and the public good. Read the full article here: https://www.profaruwa.org/
Atiku raises alarm over $4.5bn NNPC oil-backed loan deal
Legit.ng earlier reported that former Vice President Atiku Abubakar has condemned the National Economic Council's (NEC) approval of a $4.5 billion refinancing of the Nigerian National Petroleum Company (NNPC) Limited's oil-backed loan, saying it proves the Tinubu administration is sacrificing Nigeria's future to cover its fiscal failures.
Atiku noted that the Presidency had, only days earlier, responded to his disclosure of an unexplained ₦17 trillion crude oil windfall by admitting that Nigeria could not fully benefit from high international oil prices because future crude earnings had already been pledged against existing oil-backed loans. He said that response alone should have shamed any responsible government.
Source: Legit.ng
