Nigeria Draws $1.5 Billion From $5 Billion UAE Loan Deal Despite IMF Warning
Updated
Updated · Daily Trust · Jul 3
Nigeria Draws $1.5 Billion From $5 Billion UAE Loan Deal Despite IMF Warning
3 articles · Updated · Daily Trust · Jul 3
Summary
$1.5 billion has been withdrawn as the first tranche of Nigeria’s $5 billion financing facility with First Abu Dhabi Bank, advancing a deal the National Assembly approved on March 31.
The government plans to use the funds to support the 2026 budget, finance infrastructure and refinance existing debt, with the first tranche priced at 395 basis points above SOFR.
The structure requires Nigeria to post local-currency collateral worth 133.3% of the loan and adds to its exposure to the UAE lender, which had already provided about $1.2 billion for an expressway project.
The IMF had warned the Total Return Swap arrangement could be opaque, trigger margin-call risks and constrain monetary or exchange-rate policy; Nigeria's external debt stood at $51.9 billion at end-2025.
In early July 2026, Nigeria secured a $5 billion financing facility from First Abu Dhabi Bank, with an initial $1.5 billion already drawn down after swift approval by the National Assembly. This first tranche is set to support the 2026 budget, fund essential infrastructure projects, and help refinance existing debt. The move comes amid rising concerns from international organizations about the risks and transparency of such complex financing, especially as Nigeria’s debt servicing needs grow. The deal highlights Nigeria’s urgent need for funding and the government’s strategy to address fiscal challenges through external borrowing.