By Daniel Oluwatobiloba Popoola
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has ruled out publishing details of how the Federal Government intends to spend funds drawn from its $5 billion financing facility with First Abu Dhabi Bank (FAB), insisting the transaction had been subjected to needless scrutiny.
Oyedele stated this on Wednesday, 19 August, 2026 during a media briefing in Abuja, where he maintained that the facility, already approved by the National Assembly, was structured to help the government refinance costlier debt and was not different from other sovereign borrowings that had not attracted similar public interest.
Recall that the Federal Government had recently drawn about $1.5 billion, being the first tranche of the $5 billion Total Return Swap facility arranged with FAB, a move that had drawn concerns from the International Monetary Fund (IMF) and Fitch Ratings over the transparency and risks associated with such financing structures.
The $5 billion facility was approved by the National Assembly on March 31, 2026, with the initial drawdown expected to support the 2026 budget, fund infrastructure projects, and refinance existing debt obligations.
Responding to questions on whether the government would make public the details of the FAB transaction, Oyedele said the administration would continue to disclose how it spends public funds generally but queried why the facility in particular had become a subject of 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,” he said.
He wondered why similar demands had not been made regarding funds sourced from other instruments, noting that no one had asked the government to publish how it spent money obtained from the World Bank, Eurobond, or Sukuk issuances.
The minister also dismissed insinuations that the transaction was concluded without due process, explaining that it had gone through the Federal Executive Council and was subsequently presented to the National Assembly for approval, unlike similar arrangements in other countries that were done without legislative scrutiny.
“What else can be more public than what you gave to the National Assembly?” he asked.
Oyedele disclosed that the government was drawing down the facility in phases to avoid incurring unnecessary costs, explaining that taking the entire sum at once would attract additional charges on the unutilised portion.
“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.
He further explained that the FAB facility differed from Nigeria’s conventional fixed-rate borrowings in that it operated on a flexible interest rate, which he said could work in the country’s favour depending on market conditions.
“You need to understand the transaction. There’s always the textbook analysis and there’s the real life of what you’re doing. We’re used to raising bonds on fixed interest rate terms. Our Eurobonds, for example, were raised when the coupon was in double digits. Today, our yield is down to around seven, 7.5 per cent,” Oyedele said.
He noted that Nigeria could not benefit from the drop in yields on its existing fixed-rate debt, whereas the FAB arrangement allowed for such flexibility.
“This First Abu Dhabi Bank transaction is flexible rate. It means if rates go up, we pay more. If rates come down, we benefit more. There’s nothing that says we must always do one thing. And the all-in rate for this transaction is lower than our existing portfolio,” he said.
According to him, the primary objective of the facility remains to refinance more expensive debt and reduce the government’s overall borrowing costs.
“So the objective is to use it to refinance expensive debt so you can save money,” he stated.
Under the arrangement, the Federal Government is required to pledge securities worth about 133 per cent of the amount drawn as collateral.
The IMF had earlier warned that derivative financing structures such as total return swaps could be difficult to track and value in real time, potentially obscuring the true extent of a country’s financial obligations. Fitch Ratings, in a similar vein, had cautioned that the $5 billion arrangement could heighten sovereign debt risks and reduce transparency in Nigeria’s public debt reporting.
Despite the concerns, Oyedele said the government would shortly publish a set of frequently asked questions on the transaction to address the issues raised by critics and the international media.
“In the next few days, you will see on the website of both the Ministry of Finance and the DMO the frequently asked questions about this particular debt or bond, just so everybody can please themselves,” he said.
He reiterated that there was nothing unusual about the loan, despite the level of attention it had drawn.
“I spend time on it because I think it’s important, and the international media, for some reason, have taken so much interest in it. But that is what it is,” Oyedele said.
