Nigeria Draws $1.5 Billion From $5 Billion UAE Loan as IMF Warns of Opacity
Updated
Updated · Business Insider Africa · Jun 28
Nigeria Draws $1.5 Billion From $5 Billion UAE Loan as IMF Warns of Opacity
2 articles · Updated · Business Insider Africa · Jun 28
Summary
$1.5 billion has already been drawn by Nigeria from a $5 billion UAE-backed facility arranged with First Abu Dhabi Bank, marking the first tranche of financing approved by the National Assembly in March.
The government plans to use the money to support its 2026 budget, fund infrastructure and restructure debt, with the first tranche priced at 395 basis points above SOFR and later tranches at 400 basis points.
The IMF warned this month that Total Return Swap structures can be opaque and hard to assess, and said parts of the deal could create political constraints on monetary or exchange-rate policy.
Nigeria is pledging local-currency assets worth 133.3% of the loan as collateral, adding to exposure to a lender that had already provided about $1.2 billion for part of a new expressway.
The borrowing adds to scrutiny of Nigeria's debt profile, with the Debt Management Office showing external debt at $51.9 billion at the end of December.