The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has rejected calls for the Federal Government to publish details of how it plans to spend funds drawn from its $5bn financing facility with First Abu Dhabi Bank.\n<\/p>\n
Oyedele said the transaction had been subjected to unnecessary scrutiny, arguing that the facility was approved by the National Assembly and was structured to help the government refinance more expensive debt.\n<\/p>\n
He spoke on Wednesday during a media briefing in Abuja.\n<\/p>\n
The Federal Government recently drew about $1.5bn, the first tranche of the $5bn Total Return Swap facility arranged with First Abu Dhabi Bank, despite concerns from the International Monetary Fund and Fitch Ratings over the transparency and risks associated with such financing structures.<\/p>\n
The $5bn facility was approved by the National Assembly on March 31, 2026, while the initial drawdown was expected to support the 2026 budget, infrastructure projects and the refinancing of existing debt obligations.\n<\/p>\n
Responding to a question on the borrowing plan and whether details of the First Abu Dhabi Bank transaction would be made public, Oyedele said the government would publish information on how it spends public funds but questioned why the particular facility was receiving special attention.\n<\/p>\n
\u201cWe will not publish how we are spending it. We will publish how we spend government money. There\u2019s nothing special about that loan,\u201d he said.<\/p>\n
He added, \u201cNobody has asked us whether we\u2019re 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?\u201d\n<\/p>\n
Oyedele also dismissed suggestions that the transaction was conducted without due process, noting that it had been presented to the National Assembly.\n<\/p>\n
\u201cThe loan was approved not only by FEC, it was taken to National Assembly because what some people are doing is they comparing with other countries where they did it under the table.\n<\/p>\n
\u201cWhat else can be more public than what you gave to the National Assembly?\u201d he said.\n<\/p>\n
The minister said the government had assessed the transaction carefully and was accessing the funds in phases to avoid incurring unnecessary costs.\n<\/p>\n
\u201cWe\u2019re assessing it in phases. You don\u2019t want to take all the money at once because if you don\u2019t spend it at once, you incur cost on the extra amount you\u2019ve taken,\u201d he said.\n<\/p>\n
He explained that the financing arrangement was different from Nigeria\u2019s traditional fixed-rate borrowing because the First Abu Dhabi Bank facility had a flexible interest rate.<\/p>\n
\u201cYou need to understand the transaction. You know, there\u2019s always the textbook analysis and there\u2019s the real life of what you\u2019re doing. <\/p>\n
\u201cSo, we\u2019re used to raising bonds on fixed interest rate terms. You see, I can tell you our Eurobond, for example, they were raised when the coupon was double digits. Today, our yield is down to around seven, 7.5 per cent,\u201d Oyedele said.\n<\/p>\n
According to him, Nigeria could not benefit from the lower yield on its existing fixed-rate debt.\n<\/p>\n
\u201cThis First Abu Dhabi Bank transaction is flexible rates. It means if rates go up, we pay more. If rates come down, we benefit more.\n<\/p>\n
\u201cThere\u2019s nothing that says we must always do one thing. And the all-in rate for this transaction is lower than our existing portfolio,\u201d he said.\n<\/p>\n
Oyedele said the primary objective was to refinance more expensive debt and reduce the government\u2019s borrowing costs.\n<\/p>\n
\u201cSo the objective is to use it to refinance expensive debt so you can save money,\u201d he said.<\/p>\n
The Federal Government is required to pledge securities worth about 133 per cent of the amount drawn as collateral under the arrangement.\n<\/p>\n
The International Monetary Fund and Fitch Ratings had raised concerns about the financing structure, including issues around transparency and sovereign debt risks.\n<\/p>\n
The IMF had warned that derivative financing structures such as total return swaps could be difficult to track and value in real time, potentially obscuring the extent of a country\u2019s financial obligations.\n<\/p>\n
Fitch Ratings also warned that Nigeria\u2019s planned $5bn arrangement could increase sovereign debt risks and reduce transparency in public debt reporting.\n<\/p>\n
Oyedele, however, said the government would soon publish frequently asked questions on the transaction to provide further clarification.\n<\/p>\n
\u201cIn the next few days, you will see on the website both the Ministry of Finance and DMO the frequently asked questions about this particular debt or bond, just so everybody can please themselves,\u201d he said.\n<\/p>\n
He added that there was \u201cnothing special\u201d about the loan, despite the attention it had received from critics and international media.<\/p>\n
\u201cI spend time on it because I think it\u2019s important and the international media also, for some reason, have taken so much interest in it. But that is what it is.\u201d Oyedele said.\n <\/p>\n","protected":false},"excerpt":{"rendered":"The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has rejected calls for the Federal…\n","protected":false},"author":2,"featured_media":273337,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[45],"tags":[185077,136395,3271,128351,109148,185078,12985,122,185079,19075,10056],"class_list":["post-387322","post","type-post","status-publish","format-standard","has-post-thumbnail","category-nigeria","tag-abu-dhabi-loan","tag-debt-refinancing","tag-federal-government","tag-first-abu-dhabi-bank","tag-fitch-ratings","tag-imf-concerns","tag-national-assembly","tag-nigeria","tag-nigerian-debt","tag-public-funds","tag-taiwo-oyedele"],"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/posts\/387322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/comments?post=387322"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/posts\/387322\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/media\/273337"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/media?parent=387322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/categories?post=387322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/africa\/wp-json\/wp\/v2\/tags?post=387322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}