Oyedele: Nigerian govt won’t disclose spending details of $5bn Abu Dhabi facility

THE Federal Government has ruled out releasing a transaction-specific breakdown of how it will deploy funds accessed from its $5 billion financing arrangement with First Abu Dhabi Bank.

Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said the facility was being subjected to disproportionate scrutiny even though it had secured legislative approval and was designed largely to replace more costly debt.

Oyedele spoke on Wednesday during a media briefing in Abuja.

Nigeria has so far drawn about $1.5 billion from the arrangement, the first tranche of the $5 billion Total Return Swap facility. The structure has drawn concerns from the International Monetary Fund and Fitch Ratings, particularly over transparency and its implications for sovereign debt management.

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The National Assembly approved the facility on March 31, 2026. The government had indicated that the financing would help fund the 2026 budget, infrastructure programmes and the refinancing of existing liabilities.

Addressing questions about disclosure, Mr Oyedele said the government would continue to account for public expenditure but would not create a separate reporting framework for the Abu Dhabi facility.

He questioned why the facility should be treated differently from other government financing sources, including loans from multilateral institutions, Eurobonds and Sukuk.

The minister also defended the approval process, saying the financing was considered by the Federal Executive Council (FEC) before being submitted to the National Assembly.

He said the government was deliberately accessing the facility gradually because drawing the entire amount prematurely would expose the country to unnecessary financing costs.

Oyedele said the transaction also provides greater flexibility than conventional fixed-rate borrowing because its interest rate can move with market conditions.

He noted that Nigeria’s existing Eurobonds were issued at fixed rates when yields were significantly higher, meaning the country could not benefit from subsequent declines in borrowing costs.

Under the Abu Dhabi arrangement, he said, Nigeria would pay more if rates rise but could enjoy lower financing costs when rates fall.

Oyedele maintained that the facility carries a lower all-in cost than Nigeria’s existing debt portfolio and is therefore intended primarily to refinance expensive obligations.

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The government is required to provide securities worth approximately 133 percent of the amount drawn as collateral.

The IMF has cautioned that total return swap structures can make sovereign obligations harder to monitor and value, while Fitch has warned that the arrangement could raise debt risks and reduce transparency in public debt reporting.

Oyedele said the Finance Ministry and Debt Management Office would publish a frequently asked questions document on the facility to address concerns surrounding the transaction.