By Ikechukwu Samuel
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has rejected calls for the Federal Government to publish specific details on how it intends to spend funds drawn from its $5bn financing facility with First Abu Dhabi Bank.
Oyedele said the transaction had received unnecessary scrutiny, stressing that the facility was approved by the National Assembly and structured primarily to refinance more expensive debt. He spoke during a media briefing in Abuja.
The Federal Government recently drew about $1.5bn, representing the first tranche of the $5bn Total Return Swap facility arranged with First Abu Dhabi Bank.
The facility has attracted scrutiny, including concerns from the International Monetary Fund and Fitch Ratings over transparency and risks associated with the financing structure.
The National Assembly approved the $5bn facility on March 31, 2026. The initial drawdown was expected to support the 2026 budget, infrastructure projects and the refinancing of existing debt obligations.
Asked whether details of the transaction and the government’s spending plans would be made public, Oyedele said the government would provide information on public spending but questioned why the particular facility had received special attention.
“We will not publish how we are spending it. We will publish how we spend government money. There’s nothing special about that loan,” the Finance Minister said said.
He also compared the transaction with other sources of government financing, including World Bank loans, Eurobonds and 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.
Oyedele dismissed suggestions that the financing arrangement was undertaken without due process, noting that it was considered by the Federal Executive Council before being presented to the National Assembly.
“The loan was approved not only by FEC, it was taken to National Assembly,” he said.
The minister said the government was accessing the facility in phases to avoid incurring unnecessary costs from borrowing funds before they were required.
“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.
Oyedele explained that the First Abu Dhabi Bank arrangement differed from Nigeria’s traditional fixed-rate borrowing because it operates on a flexible interest rate.
According to him, the arrangement means Nigeria would pay more if interest rates rise but could benefit if rates decline.
He said the transaction’s overall rate was lower than that of Nigeria’s existing debt portfolio.
“This First Abu Dhabi Bank transaction is flexible rates. It means if rates go up, we pay more. If rates come down, we benefit more,” he said.
Oyedele said the main objective of the facility was to refinance more expensive debt and reduce government borrowing costs.
The Federal Government is required to pledge securities valued at about 133 per cent of the amount drawn as collateral under the arrangement.
The IMF and Fitch Ratings have raised concerns about the financing structure, including transparency and sovereign debt risks.
The IMF has warned that derivative financing structures such as total return swaps can be difficult to track and value in real time, while Fitch has raised concerns about the potential impact on Nigeria’s sovereign debt risks and public debt reporting.
Oyedele said the Ministry of Finance and the Debt Management Office would publish frequently asked questions on the transaction in the coming days to provide additional clarification.
