FG Won’t Publish How $5bn Loan Is Spent, Says Oyedele

The Federal Government will not publish details of how it plans to spend funds drawn from its $5bn financing facility with First Abu Dhabi Bank, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said.

Oyedele made this know during a media briefing in Abuja, where he defended the transaction amid concerns over its transparency and potential debt risks.

The Federal Government recently drew about $1.5bn, representing the first tranche of the $5bn Total Return Swap facility arranged with First Abu Dhabi Bank.

The facility was approved by the National Assembly on March 31, 2026, with the government saying it would support the 2026 budget, infrastructure projects and the refinancing of existing debt obligations.

Asked whether the government would make public details of how the funds would be spent, Oyedele said there was no need to single out the First Abu Dhabi Bank facility for special disclosure.

“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.

The minister questioned why the facility had attracted particular scrutiny when other sources of government financing, including World Bank loans, Eurobonds and Sukuk, were not receiving similar attention.

“Nobody has asked us whether we’re going to publish the money we took from the World Bank, whether we publish the one from Eurobond, whether we publish the one from Sukuk. Why is this one special?” he asked.

Oyedele also rejected suggestions that the transaction was conducted without adequate oversight, stressing that it was approved by both the Federal Executive Council and the National Assembly.

“The loan was approved not only by FEC, it was taken to National Assembly because what some people are doing is they comparing with other countries where they did it under the table,” he said.

“What else can be more public than what you gave to the National Assembly?”

He explained that the government was drawing the funds in phases to avoid paying costs on money that had not yet been deployed.

“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,” Oyedele said.

The minister further defended the structure of the facility, saying it differed from Nigeria’s traditional fixed-rate borrowing because it carried a flexible interest rate.

According to him, the arrangement allows Nigeria to benefit if interest rates decline, although the country would face higher costs if rates rise.

“This First Abu Dhabi Bank transaction is flexible rates. It means if rates go up, we pay more. If rates come down, we benefit more,” he said.

Oyedele said the government’s assessment showed that the all-in rate on the transaction was lower than that of its existing debt portfolio.

“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.

He said the main objective of the facility was 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 said.

Under the arrangement, the Federal Government is required to pledge securities worth about 133 per cent of the amount drawn as collateral.

The financing structure has, however, attracted concerns from the International Monetary Fund and Fitch Ratings.

The IMF warned that derivative financing arrangements such as total return swaps could be difficult to track and value in real time, potentially making it harder to assess the full extent of a country’s financial obligations.

Fitch also raised concerns that the planned $5bn arrangement could increase sovereign debt risks and reduce transparency in Nigeria’s public debt reporting.

Oyedele said the government would provide further clarification on the facility, with frequently asked questions expected to be published on the websites of the Ministry of Finance and the Debt Management Office.

“In the next few days, you will see on the website both the Ministry of Finance and DMO the frequently asked questions about this particular debt or bond, just so everybody can please themselves,” he said.

The minister maintained that the facility had received disproportionate attention despite being approved through the country’s established borrowing process.

“I spend time on it because I think it’s important and the international media also, for some reason, have taken so much interest in it. But that is what it is,” Oyedele said.