The Federal Government has defended its controversial $5 billion financing facility with First Abu Dhabi Bank, saying it will not publish specific details of how funds drawn from the facility are spent.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the clarification during a media briefing in Abuja on Wednesday.
Nigeria has so far drawn about $1.5 billion from the facility, which was approved by the National Assembly on March 31, 2026. The financing arrangement was designed to support the 2026 budget, infrastructure projects and the refinancing of existing debt obligations.
Oyedele said the government would continue to publish information on how public funds are spent but rejected calls for special disclosure requirements for the Abu Dhabi facility.
He argued that the loan had received the necessary approval from the National Assembly and was therefore not obtained secretly.
According to the minister, the government is accessing the facility gradually rather than drawing the entire amount at once. He explained that taking more money than needed could result in unnecessary financing costs on funds that had not yet been deployed.
Government Defends Loan Structure
Oyedele also defended the structure of the financing arrangement, explaining that it differs from Nigeria’s traditional fixed-rate borrowing.
He said the facility operates on a flexible interest-rate structure, meaning that Nigeria could benefit if interest rates decline, although borrowing costs could also rise if rates increase.
The minister maintained that the overall cost of the transaction is lower than Nigeria’s existing debt portfolio and said the primary objective is to use the facility to refinance more expensive debt and reduce borrowing costs.
The government is required to pledge securities worth approximately 133 per cent of the amount drawn as collateral under the arrangement.
IMF and Fitch Raise Concerns
The $5 billion facility has attracted scrutiny from international financial institutions.
The International Monetary Fund has raised concerns about the transparency and risks associated with derivative financing structures such as total return swaps, warning that such arrangements can make financial obligations more difficult to track.
Fitch Ratings has also expressed concerns that the arrangement could increase sovereign debt risks and reduce transparency in Nigeria’s public debt reporting.
Oyedele, however, said the government had carefully assessed the transaction before proceeding.
He added that the Ministry of Finance and the Debt Management Office would publish a frequently asked questions document in the coming days to provide further explanations about the financing arrangement and address concerns surrounding the loan.
The minister maintained that there was nothing unusual about the facility and insisted that the government's decision to access it in phases was aimed at managing costs and improving Nigeria's debt position.
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