Nigeria draws $1.5 bn from $5 bn UAE financing facility

Nigeria has accessed the first $1.5 billion tranche of a $5 billion financing programme with the United Arab Emirates’ First Abu Dhabi Bank. The funding is structured as a Total Return Swap, allowing the federal government to obtain dollar liquidity without issuing a conventional sovereign bond. The programme, approved by Nigeria’s National Assembly, is intended to support the 2026 budget, finance key infrastructure projects and refinance higher‑cost external debt.

The drawdown is collateralised by naira‑denominated securities valued at 133.3 % of the amount drawn, and carries an interest rate of 395 basis points over the Secured Overnight Financing Rate, rising to 400 bps thereafter. International bodies have flagged risks: the IMF warned that the swap could constrain monetary or exchange‑rate policy, while rating agencies such as Fitch noted that margin‑call requirements could intensify foreign‑exchange pressure if the naira weakens. Nigeria’s external debt stood at about $110 bn at the end of 2025, and the new facility adds to a broader effort to diversify funding sources amid high global borrowing costs.