Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele
Federal Government has said it would not publish a specific breakdown of how funds accessed under its $5 billion financing facility with First Abu Dhabi Bank (FAB) will be spent.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this at the media briefing in Abuja while responding to questions on the government’s borrowing plans and the controversial FAB financing arrangement.
Oyedele said the facility should not be treated differently from other sources of government financing, stressing that the transaction had passed through the required approval processes, including consideration by the National Assembly.
“We will not publish how we are spending it. We will publish how we spend government money. There’s nothing special about that loan,” he said.
“Nobody has asked us whether we’re going to publish the money we took from the World Bank, whether we publish the one from Eurobond, whether we publish the one from Sukuk. Why is this one special?”
The $5 billion FAB facility forms part of a broader $6 billion external borrowing package approved by the National Assembly in March. The government has so far accessed about $1.5 billion as the first tranche.
The arrangement has attracted scrutiny because it is structured as a total return swap (TRS), rather than a conventional sovereign loan.
Oyedele said the facility was first approved by the Federal Executive Council (FEC) before being submitted to the National Assembly.
“The loan was approved not only by the FEC, it was taken to the National Assembly because what some people are doing is comparing it with other countries where they did it under the table,” he said.
“What can be more public than what you gave to the National Assembly?”
FG to Draw Funds in Phases
The minister also said the government would access the FAB facility in phases instead of drawing down the entire $5 billion at once.
“We’re assessing it in phases. You don’t want to take all the money at once because if you don’t spend it at once, you incur costs on the extra amount you’ve taken,” he said.
According to Oyedele, the phased drawdown is aimed at improving the efficiency of the transaction and reducing the cost of government borrowing.
He explained that the FAB facility differs from Nigeria’s traditional fixed-rate borrowing because it carries a flexible interest rate.
Oyedele noted that many of Nigeria’s existing bonds and Eurobonds were issued at fixed rates, meaning the government continues to pay the agreed coupon even when market interest rates fall.
“This First Abu Dhabi Bank transaction is at a flexible rate. It means if rates go up, we pay more. If rates come down, we benefit more,” he said.
The minister acknowledged that the floating-rate structure could increase the government’s financing costs if interest rates rise but maintained that the facility was considered cheaper than some of the government’s existing debt.
He said the plan was to use the financing to refinance more expensive debt and generate savings.
“So the objective is to use it to refinance expensive debt so you can save money,” Oyedele said.
He added that the Ministry of Finance and the Debt Management Office (DMO) would publish frequently asked questions on their websites to provide more information about the transaction.
Oyedele maintained that the government remained committed to transparency but said it would not publish a separate expenditure breakdown for the FAB proceeds.
The comments come amid continued scrutiny of Nigeria’s borrowing strategy and the structure of the FAB transaction, with concerns also raised over the fiscal risks associated with complex financing arrangements.
