Nigeria Secures $1.5bn from $5bn Loan for 2026 Budget

The Federal Government of Nigeria has accessed the first tranche of $1.5 billion from a total $5 billion loan facility arranged with First Abu Dhabi Bank, the largest lender in the United Arab Emirates. This drawdown, approved by the National Assembly on March 31, 2026, is intended to provide fresh foreign currency funding to support Nigeria's 2026 budget and finance critical infrastructure projects while also refinancing existing debt.

The arrangement comes at a time when African economies, including Nigeria, are facing elevated borrowing costs in the international market, prompting the government to explore alternative financing options. The agreement includes a pledge of federal government securities worth 133% of the amount drawn, translating to approximately 6.65 billion naira-denominated bonds.

This structure allows Nigeria to receive dollar liquidity from First Abu Dhabi Bank, which will earn returns on the pledged government securities. Additionally, the federal government expects to pay a floating interest rate benchmark plus four percentage points on the arrangement.