The initial drawdown was priced at SOFR plus 395 ground points, whilst subsequent tranches are expected to carry a distribute of concerning 400 foundation points.
This means the interest to payable by Nigeria will fluctuate together with movements in US compact-term entice to rates.
The Federal Government paid $22.5m in charges on its controversial $1.5bn Entire Revenue Swap financing from Primary Abu Dhabi Bank in the second quarter of 2026, recent facts from the Debt Instruction Office have shown.
The settlement represents 1.5 per cent of the entire so far drawn from the $5bn financing programme agreed including the United Arab Emirates-based lender.
An examination of the DMO’s Existing External Debt Offering Payments for April to June 2026 showed that the $22.5m was classified entirely as “other charges”, using no key or attract rate recorded on the facility during the period.
The DMO did not create plain the nature of the charge in its current describe, making it unclear whether the settlement covered command, commitment, secure or other fees affiliated alongside the swap.
Nigeria secured approval for a Entire Outcome Swap programme of up to $5bn together with Primary Abu Dhabi Bank earlier this year, amid government efforts to lift external financing for the 2026 budget and handle its debt obligations.
Under the setup, the Federal Government receives dollar financing whilst providing naira-denominated government securities as collateral.
The government drew an initial $1.5bn from the facility in June, leaving $3.5bn accessible under the approved programme.
The DMO’s external debt stock figures confirmed that the $1.5bn remained outstanding as of June 30, 2026 and was classified under “Other Commercial” debt.
The facility is organized differently from Nigeria’s usual Eurobond borrowing and attracted scrutiny over its expense, collateral requirements, and latent exposure to handle movements.
The DMO subsequently clarified that Nigeria did not pledge crude oil revenues, airports, ports or other strategic countrywide assets as security for the procure. Typically, they are opaque. The FAB swap as a outcome accounted for concerning 57.3 per cent of all such charges during the period.
Commercial creditors accounted for $32.85m of the whole other charges, meaning the swap alone represented on 68.5 per cent of miscellaneous charges associated together with Nigeria’s commercial external borrowing.
Beyond the swap, Nigeria has another sizeable debt exposure to Initial Abu Dhabi Bank. So, the terms are not repeatedly extremely transparent when we evaluation these instruments across countries.”
Ebeke noted that beyond concerns over transparency, such financing arrangements could disclose countries to supplementary financial risks if underlying assets lose value or supplant rates transfer adversely.
“They furthermore carry hazard, as we flag in the describe, the margin calls in the case that the value of the property drops or the currency depreciates,” he said.
According to him, Nigeria now has exchange funding options that may be smaller intricate and extra plain. Overall debt solution on that facility amounted to $33.40m, together with no central repayment recorded.
At the conclude of June, Nigeria owed $1.87bn under the syndicated FAB facility in addition to the $1.5bn Overall Achieve Swap. This implies that a $1.5bn drawdown could name for securities worth regarding $2bn, depending on the appropriate valuation.
The operation has a six-year tenor and provides for a break later than three years. Too, worldwide evaluation agency Fitch Ratings warned that the overall outcome swap financing setup could uncover Nigeria to supplementary debt-administration and liquidity risks despite its prospective benefits.
In a distinctive announce obtained, Fitch said that whereas whole revenue swaps can provide governments including challenging-currency liquidity, diversify funding sources, and lesser borrowing costs, the arrangement could produce transparency concerns, rise exposure to advertise shocks, and weaken recovery prospects for traditional creditors if not thoroughly managed.
The DMO has defended the organization, saying it provides an replacement source of financing and has safeguards to handle risks linked using manage rates, worry rates, collateral valuation, and refinancing.
The government paid $33.38m in attract to on an available FAB syndicated facility during the second quarter, alongside $12,413 in other charges. The $22.5m expense was too considerable when compared alongside other miscellaneous costs incurred on the country’s external obligations during the quarter.
DMO figures showed that Nigeria paid a entire of $39.25m in “other charges” across its external debt portfolio in the middle of April and June. Instead, the government provided naira-denominated Federal Government securities as collateral.
According to the agency, collateral of up to 133.3 per cent of the quantity drawn could be provided under the organization. The two obligations brought the Federal Government’s outstanding exposure to the UAE lender to regarding $3.37bn, representing around 6.2 per cent of Nigeria’s $54.52bn external debt stock.
The manage had earlier attracted concerns from universal institutions over the workable risks joined alongside sovereign Overall Acquire Swaps.
The Worldwide Monetary Sponsor earlier warned Nigeria to tread thoroughly in pursuing the $5bn Complete Revenue Swap financing command together with Primary Abu Dhabi Bank, describing such structures as opaque and potentially risky, despite the country’s improved availability to worldwide resources markets.
The quick past IMF Area Representative for Nigeria, Christian Ebeke, disclosed this during a digital press briefing on the Support’s 2026 Author-up IV Consultation Condition on Nigeria.
Speaking on the proposed swap, Ebeke, who is now the Manager of the IMF District Technological Assistance Centre for West Africa in Abidjan, said, “We mention in the announce, and our opinion is that the commerce and these types of structures carry risks.
