Nigeria has tapped into a massive structured finance deal with the UAE’s largest lender, drawing $2 billion from a $5 billion total return swap facility arranged with First Abu Dhabi Bank (FAB). The arrangement gives Africa’s biggest economy access to dollar liquidity at a time when traditional external borrowing has become more expensive.
How the swap works
Nigeria posts Federal Government of Nigeria (FGN) securities worth approximately 133% of whatever amount it draws. For the full $5 billion facility, that means roughly $6.65 billion in naira-denominated bonds sitting as collateral.
In exchange, FAB provides dollar liquidity. Nigeria pays a floating interest rate pegged to a benchmark plus approximately 4%, while FAB receives the returns generated by the underlying bonds.
Nigeria’s House of Representatives gave legislative approval for the facility on March 31, 2026. The $2 billion draw represents an initial, partial utilization of the approved ceiling.
