The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has dismissed demands for the Federal Government to release detailed spending plans for its $5bn financing facility with First Abu Dhabi Bank.
Speaking at a media briefing in Abuja on Wednesday, Oyedele said the loan had been subjected to “unnecessary scrutiny,” stressing that it was duly approved by the National Assembly and designed to refinance Nigeria’s more expensive debt.
The government recently drew $1.5bn, the first tranche of the $5bn Total Return Swap facility, despite concerns raised by the International Monetary Fund (IMF) and Fitch Ratings about transparency and sovereign debt risks.
Oyedele argued that the facility was no different from other loans Nigeria had accessed, such as Eurobonds and World Bank financing.
“We will not publish how we are spending it. We will publish how we spend government money. There’s nothing special about that loan,” he said.
He explained that the funds were being accessed in phases to avoid unnecessary costs, noting that the flexible interest rate structure of the Abu Dhabi facility could benefit Nigeria if global rates decline.
“The objective is to refinance expensive debt so you can save money,” he added.
The minister emphasized that the arrangement was transparent, having been presented to both the Federal Executive Council and the National Assembly.
He also announced that the Ministry of Finance and Debt Management Office would soon publish a set of frequently asked questions to clarify the transaction.
Despite warnings from IMF and Fitch about the risks of derivative financing structures, Oyedele maintained that the deal was carefully assessed and would ultimately reduce Nigeria’s borrowing costs.
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