Politics
Oyedele says FG won’t publish details of $5bn Abu Dhabi loan
THE Federal Government has rejected calls for the disclosure of detailed information on how the proceeds of its $5 billion financing arrangement with First Abu Dhabi Bank will be deployed.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said this on Wednesday during a media briefing in Abuja, insisting that the transaction had received legislative approval.
“We will not publish how we are spending it. We will publish how we spend government money. There’s nothing special about that loan,” Oyedele said.
Oyedele said the government would account for its expenditure but questioned why the First Abu Dhabi Bank facility should receive special disclosure treatment compared with other government borrowings. He added that the government had not been subjected to similar demands to disclose the specific deployment of proceeds from World Bank loans, Eurobonds or Sukuk.
“Nobody has asked us whether we’re going to publish the money we took from the World Bank, whether we publish the one from Eurobond, whether we publish the one from Sukuk. Why is this one special?” he asked.
The ICIR reports that the development comes amid heightened scrutiny of the financing arrangement after Nigeria accessed the first tranche of about $1.5 billion from the facility in June.
The $5 billion arrangement is structured as a Total Return Swap (TRS) rather than a conventional sovereign loan, as the National Assembly approved President Bola Tinubu’s request for up to $6 billion in external borrowing on March 31, 2026.
The package comprised the $5 billion First Abu Dhabi Bank facility and a separate $1 billion facility backed by UK Export Finance for port rehabilitation.
The Federal Government said the $5 billion facility is intended to support budget implementation, finance priority infrastructure projects and refinance more expensive domestic and external debt.
Oyedele confirmed in June that Nigeria had accessed the first $1.5 billion, saying the government would draw the facility in phases to minimise costs.
Speaking on why the government would not make the details of the spending available, Oyedele said, “The loan was approved not only by FEC, it was taken to National Assembly because what some people are doing is they are comparing with other countries where they did it under the table.
“What else can be more public than what you gave to the National Assembly?” he said.
The minister argued that the government had assessed the transaction carefully and was accessing the funds in phases to avoid incurring unnecessary costs.
“We’re assessing it in phases. You don’t want to take all the money at once because if you don’t spend it at once, you incur cost on the extra amount you’ve taken,” he said.
He explained that the financing arrangement was different from Nigeria’s traditional fixed-rate borrowing because the First Abu Dhabi Bank facility had a flexible interest rate.
According to him, Nigeria could not benefit from the lower yield on its existing fixed-rate debt.
Reports on the transaction indicate that Nigeria is required to pledge Federal Government securities worth about 133 per cent of the amount drawn as collateral for dollar financing, unlike conventional Eurobonds.
If the full $5 billion facility is utilised, the collateral would be worth approximately $6.65 billion in naira-denominated government bonds.
The first tranche was reportedly priced at about 395 basis points above the Secured Overnight Financing Rate, with subsequent tranches expected to be priced at around SOFR plus 400 basis points.
The government has defended the structure on the grounds that it provides access to foreign currency at a lower cost than some existing borrowing while allowing Nigeria to refinance more expensive debt.
The government’s defence of the transaction comes after the International Monetary Fund warned Nigeria about the risks associated with derivative-based sovereign financing.
In its 2026 Article IV consultation, the IMF said Nigeria’s total return swap, including the over-collateralisation, had been incorporated into its assessment of the country’s external debt. It also warned that margin calls could arise during the life of the transaction and force Nigeria to provide additional collateral.
The IMF’s Nigeria representative, Christian Ebeke, had warned in June that transactions of this type could be difficult to assess because they are often complex and lack transparency.
The Fund said Nigeria could consider more conventional sources of financing, including Eurobonds and concessional funding, given its improving access to international capital markets.
Fitch Ratings subsequently warned that the $5 billion arrangement could create additional sovereign debt-management and liquidity risks.
The rating agency said total return swaps could provide governments with hard-currency liquidity and potentially lower borrowing costs but could also create transparency concerns, expose sovereigns to market shocks and complicate future debt restructuring.
The concerns have heightened scrutiny because the TRS structure is less familiar to the Nigerian public than conventional government borrowing.
Nigeria is also not the first African country to use such financing arrangements, as Senegal and Angola have pursued similar structures, prompting broader debate over whether derivative-based sovereign financing can provide cheaper short-term liquidity without creating difficult-to-monitor contingent liabilities.
Nanji is an investigative journalist with the ICIR. She has years of experience in reporting and broadcasting human angle stories, gender inequalities, minority stories, and human rights issues. She has documented sexual war crimes in armed conflict, sex for grades in Nigerian Universities, harmful traditional practices and human trafficking.
