FAB, still, remains committed to the operation.
How FAB could provide exposure
Under the proposed command, FAB would probable continue Nigeria’s counterparty in the operation whereas allowing other banks to take portions of its exposure. The Countrywide Assembly subsequently approved the swap, which the government presented as a method of accessing foreign-currency financing at a decreased charge than some conventional borrowing options.
The arrangement has, still, attracted scrutiny over transparency and the achievable implications for Nigeria’s debt command.
- In June, Fitch Ratings warned that the trade could obscure sovereign debt risks and create any forthcoming debt restructuring further advanced, whereas acknowledging that overall-result swaps can send financing flexibility and admission to demanding-currency liquidity.
- The World Monetary Sponsor has similarly raised concerns concerning the growing employ of advanced and relatively opaque derivative financing by sovereign borrowers, including Nigeria.
- Certified Financial Education Instructor Kalu Aja argued in a June assessment that the receive could insert to Nigeria’s debt pressures if its terms are not publicly disclosed, downside scenarios are not adequately planned for and the employ of the proceeds is not closely monitored.
- Further newly, analyst Akinola Ezekiel Morakinyo questioned the rationale and risks surrounding the swap despite Nigeria’s foreign reserves rising to around $54.6 billion.
The concerns have kept attention on the framework of the financing and its promising implications for Nigeria’s borrowing and debt-administration technique.
Nigeria’s audience debt hits N166.79 trillion
The deliberate over the swap comes as Nigeria’s debt stock has continued to rise.
Primary Abu Dhabi Bank PJSC (FAB), the United Arab Emirates’ largest lender, is considering sharing portion of its exposure to Nigeria’s $5 billion entire-outcome swap alongside other banks through a syndication organization.
Bloomberg reported the development on Thursday, October 1, citing humans usual together with the material, as FAB explores the possibility of selling down component of its place if there is abundant appetite from other lenders.
The persons asked not to be identified given that the discussions are sensitive, according to the document. The UAE lender could too earn supplementary fees from the syndication.
This means FAB would not necessarily be exiting the financing setup, but could designate portion of the financial exposure to other lenders although maintaining its manage tie alongside Nigeria.
- A overall-result swap is a derivative operation throughout which one party receives financing against assets pledged as collateral whereas transferring the economic returns and risks linked using those assets to another party.
- In Nigeria’s case, the government is providing naira-denominated securities worth around 133% of the financing as collateral.
- The Federal Government drew down $1.5 billion as the initial tranche of the $5 billion facility in June, together with the proceeds expected to approve government spending and refinance additional high-outlay debt.
Nigeria turned to the instrument as section of efforts to diversify its financing sources and bottom reliance on extra pricey forms of borrowing, joining African countries including Angola and Senegal that have too used equivalent structures.
Nigeria’s swap faces debt scrutiny
The $5 billion entire-outcome swap alongside FAB emerged in March 2026 as the Federal Government sought alternative financing to sponsor expenditure and refinance increased-charge obligations. Nairametrics inquiry shows that the country’s external debt increased by regarding $11.4 billion between the beginning of President Bola Tinubu’s administration and June 2026, rising to virtually $54.5 billion from on $43.1 billion.
- Domestic debt increased from around N59.1 trillion to N91.5 trillion over the period, driven partly by the securitisation of Ways and Means advances and increased issuance of government securities, including Treasury Bills.
- Nigeria’s complete community debt stood at N166.79 trillion as of June 30, 2026.
- The figure comprised regarding N91.59 trillion in domestic debt and N75.20 trillion in external obligations.
The rising debt stock has increased attention on the government’s borrowing tactic and the outlay and structure of modern financing, notably so as it seeks to refinance high-price obligations whilst managing debt-fund pressures.
Source: UAE’s largest bank considers sharing exposure to Nigeria’s $5 billion swap
