‘It’s Risky’ — IMF Warns Tinubu’s Govt Over $5bn UAE Loan
The International Monetary Fund (IMF) has cautioned President Bola Tinubu’s administration against proceeding with Nigeria’s proposed $5 billion borrowing deal with the First Abu Dhabi Bank of the United Arab Emirates under a Total Return Swap (TRS) financing arrangement.
The warning was issued on Tuesday by the IMF Resident Representative for Nigeria, Christian Ebeke, during the presentation of the Fund’s 2026 Article IV Consultation Report on Nigeria.
The IMF said the structure of the proposed deal is opaque and could expose Nigeria to significant financial risks.
Ebeke noted that such financing arrangements often lack transparency and may leave countries vulnerable to losses if the value of underlying assets falls or if exchange rates move unfavourably.
“We say in the report, and our view is that the transaction and 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,” he said.
He added that the arrangement could also trigger additional liabilities under certain market conditions.
“They also carry risk, as we flag in the report, the margin calls in the case that the value of the asset drops or the currency depreciates.”
Ebeke further stated that the Fund had limited information on the specific transaction but maintained its concerns.
“At this point, we don’t have any further information on the TRS. But our view is that it carries risk, and it’s important to monitor those risks very, very carefully,” he said.
The Nigerian Senate had earlier approved the TRS agreement in April 2026, placing the country among African nations such as Senegal and Angola that have adopted similar financing structures.
Titilope Adako is a talented and intrepid journalist, dedicated to shedding light on the untold stories of Osun State and Nigeria. Through incisive reporting, she tackles a broad spectrum of topics, from politics and social justice to culture and entertainment, with a commitment to accuracy, empathy, and inspiring positive change.
