Nigeria paid $22.5m in second-quarter charges on UAE swap facility
Nigeria paid $22.5m in charges on its $1.5bn Total Return Swap financing from First Abu Dhabi Bank during the second quarter of 2026, according to Debt Management Office data. The payment was recorded as an “other charge”, with no principal or interest repayment listed.
Nigeria paid $22.5m in charges on its controversial $1.5bn Total Return Swap financing from First Abu Dhabi Bank during the second quarter of 2026, according to data from the Debt Management Office. The payment was recorded entirely as an “other charge” in the DMO’s external debt service report for April to June. No principal or interest payment was recorded on the facility during the period.
The DMO did not specify the nature of the charge. As a result, the available data does not establish whether it covered arrangement, commitment, transaction or other fees associated with the swap. Nigeria secured approval earlier this year for a Total Return Swap programme of up to $5bn with the UAE-based lender.
The government drew $1.5bn in June, leaving $3.5bn available under the approved programme. The amount drawn remained outstanding at June 30 and was classified as “Other Commercial” debt. Under the arrangement, the government receives dollar financing while providing naira-denominated Federal Government securities as collateral.
The DMO said collateral of up to 133.3 per cent of the amount drawn could be required, meaning a $1.5bn draw could involve securities valued at about $2bn, depending on valuation. The six-year facility has a break after three years. The first drawdown was priced at SOFR plus 395 basis points, while later tranches are expected to carry a spread of about 400 basis points.
Interest costs will therefore fluctuate with US short-term interest rates. The swap charge represented about 57.3 per cent of Nigeria’s $39.25m in external-debt “other charges” during the quarter, the DMO data showed. Nigeria also owed $1.87bn under an existing syndicated FAB facility.
Including the swap, its exposure to the lender stood at about $3.37bn at the end of June. The arrangement has drawn scrutiny. The IMF warned that such structures can be opaque and expose borrowers to margin calls, while Fitch cited possible transparency, market and liquidity risks.
The DMO has said strategic national assets were not pledged as security.
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