Nigeria’s Minister of Finance, Taiwo Oyedele, has defended the federal government’s decision to push forward with a $5 billion loan from the First Abu Dhabi Bank, despite warnings from the International Monetary Fund (IMF).
Speaking to journalists after a Federal Executive Council (FEC) meeting, Oyedele confirmed that Nigeria has initiated a drawdown of $1.5 billion from the facility. He explained that the decision to bypass the IMF’s caution was rooted in strategic financial management aimed at optimizing borrowing costs.
The Strategy Behind Tranche Drawdowns
Addressing questions on the structure of the loan, Oyedele explained that the federal government is drawing down the $5 billion facility in phases rather than taking the entire sum at once. This approach, he noted, prevents the country from paying unnecessary interest on unspent funds.
“The loan is structured to be drawn down in tranches,” Oyedele said. “One of the major advantages is that if you require $5 billion and you take everything at once, you start paying interest, even though you’re not spending all of it now. This has been structured in a way that makes us even more efficient in the cost of borrowing by taking what we need part-time.”
Debt Refinancing and Infrastructure Development
According to the Finance Minister, the loan has been fully sanctioned by the National Assembly and is designated for critical fiscal maneuvers. Specifically, the funds will be directed toward refinancing existing expensive debts, supporting the national budget, and funding crucial infrastructure projects across the country.
Oyedele also addressed critics concerned with the nation’s rising public debt, which stood at N159.28 trillion as of December 2025. He argued that negative commentary surrounding government borrowing is counterproductive and “does a disservice to the nation,” emphasizing that strategic debt is a necessary tool for economic restructuring and development.