Nigeria has received the first $1.5 billion under its $5 billion financing arrangement with First Abu Dhabi Bank (FAB), marking the initial drawdown from the external funding package approved by the national assembly earlier this year.
The funds were reportedly disbursed within the past two weeks through a structured Total Return Swap (TRS) transaction with the United Arab Emirates’ largest lender, according to a Bloomberg report citing sources familiar with the transaction.
The national assembly approved President Bola Tinubu’s request on March 31 to secure up to $6 billion in external borrowing.
The package includes a $5 billion structured financing facility from First Abu Dhabi Bank alongside another borrowing arrangement involving the United Kingdom.
President Tinubu had earlier acknowledged that the planned borrowing would increase Nigeria’s public debt, which stood at $110.3 billion, equivalent to about N159.2 trillion, as of December 31, 2025.
The latest drawdown comes despite concerns from international financial institutions over the structure of the financing.
Fitch Ratings warned that while derivative-backed transactions can improve liquidity, diversify funding sources and reduce borrowing costs, they may also limit transparency and weaken legislative oversight because they fall outside conventional debt-reporting frameworks.
The rating agency also cautioned that the arrangement could expose Nigeria to additional foreign exchange risks if domestic bond yields increase or the naira weakens further.
The International Monetary Fund has similarly raised concerns about derivative-based financing, noting that such transactions are often complex and opaque, making it more difficult to determine governments’ full debt obligations.
