IMF Raises Concerns Over Nigeria's $5bn Swap Deal

The International Monetary Fund (IMF) expressed concerns regarding the Federal Government of Nigeria's plan to secure a $5 billion total return swap arrangement with the United Arab Emirates, specifically through Abu Dhabi Bank. During a virtual briefing for the IMF's 2026 Article IV consultation report, Christian Ebek, the IMF's resident representative in Nigeria, highlighted that such financial structures are often opaque and complex, posing significant financial risks.

The Nigerian Senate recently approved the government's request for this swap arrangement, which follows similar explorations by countries like Senegal and Angola. Ebek noted that the lack of transparency makes it difficult to fully assess the risks involved, particularly regarding potential margin calls if underlying asset values decline.

The IMF suggested that Nigeria should instead issue eurobonds to finance its deficit, given the country's improved macroeconomic fundamentals and renewed access to international capital markets. The IMF expects Nigeria's economy to grow by 4.1% in 2026, with further acceleration to 4.3% thereafter.