The Federal Government of Nigeria paid $22.5 million in upfront fees during the second quarter of 2026 on its controversial $1.5 billion Total Return Swap financing from First Abu Dhabi Bank, according to new data from the Debt Management Office (DMO).
The payment represents 1.5 per cent of the initial amount drawn from a broader $5 billion financing programme agreed upon with the United Arab Emirates-based lender earlier this year to help finance the 2026 budget.An analysis of the DMO’s Actual External Debt Service Payments report for April to June 2026 revealed that the $22.5 million was classified entirely under “other charges.” Surprisingly, the data recorded zero principal or interest payments on the facility during this period.
The DMO omitted any explanation regarding the exact nature of these charges, leaving it unclear whether the multi-million dollar payout went toward arrangement, commitment, transaction, or management fees.Under the structured arrangement, Nigeria receives immediate dollar financing from First Abu Dhabi Bank by pledging naira-denominated government securities as collateral.
While the initial $1.5 billion draw-down leaves $3.5 billion available under the approved programme, global watchdogs like the IMF and Fitch Ratings have repeatedly warned against these opaque swap structures, citing severe risks of currency depreciation and sudden margin calls.
