On March 31, 2026, the National Assembly approved President Bola Tinubu\u2019s request for S6 billion in external loans, including a Total Return Swap arrangement of up to S5 billion with First Abu Dhabi Bank. The government argues the funds will support budget implementation, infrastructure projects, and refinancing of expensive debts. Nigeria\u2019s public debt stock stood at S110.3 billion (N159.2 trillion) as of December 2025, raising concerns about debt sustainability.<\/p>\n\n\n\n A Total Return Swap allows a borrower to receive upfront cash backed by government securities, while the lender takes exposure to returns on those assets. Similar arrangements have been used by Senegal and Angola, but analysts warn they introduce complex valuation issues, contingent liabilities, and foreign exchange risks.<\/p>\n\n\n\n The IMF\u2019s warning has sparked debate across Nigeria. On social media, one user wrote: \u201cWhy borrow in such a complicated way when we can\u2019t even manage simple loans?\u201d<\/em> Another posted: \u201cThis looks like another debt trap. Transparency is key.\u201d<\/em><\/p>\n\n\n\n Stakeholders also weighed in. A Lagos-based economist said: \u201cNigeria should avoid exotic instruments. Conventional Eurobonds or concessional loans are safer and easier to monitor.\u201d<\/em> The Nigeria Labour Congress warned: \u201cEvery new loan adds pressure on workers already struggling with inflation. Government must prioritize debt sustainability.\u201d<\/em><\/p>\n\n\n\n Social commentators added their voices. Bismarck Rewane noted: \u201cMilitary-style borrowing structures don\u2019t solve fiscal problems. Nigeria needs reforms to boost revenue, not opaque loans.\u201d<\/em> Japheth Omojuwa tweeted: \u201cThis is not innovation; it\u2019s gambling with Nigeria\u2019s future. Citizens deserve clarity on how debts are structured.\u201d<\/em><\/p>\n\n\n\n Policy makers defended the plan. A senior finance ministry official said: \u201cThis arrangement gives Nigeria flexibility in raising funds at a time when global borrowing costs are high. We are confident it will ease fiscal pressure.\u201d<\/em><\/p>\n\n\n\n The IMF\u2019s warning adds to growing scrutiny of Nigeria\u2019s debt strategy. While the government insists the TRS deal will ease fiscal strain, critics argue it risks deepening opacity in public finance. Analysts say Nigeria must balance urgent funding needs with long-term debt sustainability, especially as 63% of Nigerians live in poverty and inflation remains high.<\/p>\n","protected":false},"excerpt":{"rendered":" The International Monetary Fund has cautioned Nigeria against proceeding with a S5 billion derivatives-based loan from First Abu Dhabi Bank, warning that the deal is opaque and could expose the country to hidden financial risks. The Fund urged Nigeria to consider more conventional borrowing options such as Eurobonds or concessional loans. Christian Ebeke, the IMF\u2019s […]<\/p>\n","protected":false},"author":11,"featured_media":32832,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3699,2,2096,776,4,478,5,458,3,1138],"tags":[663,15069,18705,12565,18704,18702,11381,12557,10005,18703],"class_list":["post-32826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-africa","category-business","category-economics","category-educational","category-featured","category-financial","category-international","category-legal","category-naija-news","category-politics","tag-bola-tinubu","tag-civil-society","tag-concessional-loans","tag-debt-sustainability","tag-eurobonds","tag-first-abu-dhabi-bank","tag-imf","tag-nigeria-debt","tag-social-media-reactions","tag-total-return-swap"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.funminews.com\/wp-content\/uploads\/2026\/06\/l_627384_111256_updates-1.jpg?fit=700%2C390&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/posts\/32826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/comments?post=32826"}],"version-history":[{"count":2,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/posts\/32826\/revisions"}],"predecessor-version":[{"id":32842,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/posts\/32826\/revisions\/32842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/media\/32832"}],"wp:attachment":[{"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/media?parent=32826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/categories?post=32826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.funminews.com\/index.php\/wp-json\/wp\/v2\/tags?post=32826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/i0.wp.com\/www.funminews.com\/wp-content\/uploads\/2026\/06\/Artboard-1-771.png?resize=696%2C392\")
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