The Federal Government says Nigeria has accessed the first $1.5 billion from its $5 billion financing arrangement with First Abu Dhabi Bank (FAB) to support debt refinancing, infrastructure development and budget implementation.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this while briefing journalists after the Federal Executive Council (FEC) meeting on Monday in Abuja.
Oyedele said the financing facility, which had earlier received approval from the National Assembly, was designed to refinance expensive debt, finance critical infrastructure projects and support budget execution.
“The approval for that loan went to the National Assembly, so everybody is aware of it. It’s for refinancing of expensive debt, financing of infrastructure, as well as budgets,” he said.
He added that the government would not issue separate announcements each time it drew from the facility, describing the arrangement as a conventional financing programme.
The remarks mark the first official confirmation that Nigeria has begun drawing on the financing package.
Bloomberg had reported last week that Nigeria accessed about $1.5 billion through a Total Return Swap with First Abu Dhabi Bank, representing the first utilisation of the broader $5 billion facility.
Oyedele explained that the financing arrangement was deliberately structured to allow the government access to the funds in phases rather than as a lump sum, thereby reducing borrowing costs.
According to him, drawing only the amount required at a given time ensures the government pays interest only on funds already utilised.
“If you need $5 billion and you take everything at once, you start paying interest even though you’re not spending all of it now. This has been structured in a way that makes us more efficient in the cost of borrowing by taking what we need in tranches,” he said.
He said the phased drawdown forms part of the Federal Government’s broader debt management strategy aimed at lowering financing costs while providing resources for key infrastructure projects and other budgetary priorities.