Nigeria Clarifies $5bn Abu Dhabi Bank Facility Terms

The Debt Management Office (DMO) stated that the Federal Government of Nigeria (FGN) did not pledge oil revenues or strategic assets as collateral for the $5 billion Total Return Swap (TRS) facility with First Abu Dhabi Bank PJSC (FAB). Instead, Nigeria pledged naira-denominated Federal Government Bonds, which are domestic securities manageable through fiscal and monetary policy.

The TRS is a six-year financial arrangement where Nigeria provides bonds valued at 133.3% of the cash drawn, totaling approximately $6.65 billion if fully utilized. Nigeria has already drawn an initial tranche of $1.5 billion to $2 billion for infrastructure and budget deficit management.

The DMO assured that all drawdowns and collateral will be disclosed quarterly. Concerns about transparency in sovereign TRS deals have been raised by stakeholders, including the International Monetary Fund (IMF), but the DMO emphasized that the transaction was approved with full disclosure and will be reported in its public debt data.