The International Monetary Fund (IMF) has raised concerns over Nigeria’s proposed $5 billion borrowing arrangement with First Abu Dhabi Bank, warning that such financial structures may be opaque, complex and difficult to fully assess in terms of risk exposure.
Christian Ebeke, the IMF’s mission chief for Nigeria, said instruments such as Total Return Swaps (TRS) often lack transparency, making it harder for stakeholders to evaluate their terms and long-term fiscal implications.
"Our view is that transactions in these types of structures carry risks. Usually they are opaque so the terms are not always very transparent when we review these instruments across countries," Ebeke told reporters following the Fund’s latest Article IV consultation.
Nigeria’s Senate approved the borrowing arrangement in April. The government intends to use the proceeds to refinance high-cost debt and fund infrastructure projects.
Similar structures have been used in parts of Africa, including Senegal and Angola, as governments seek alternative financing channels amid tighter global liquidity conditions.
