IMF Warns Nigeria Against Risky $5 Billion Bank Swap Deal

The International Monetary Fund warned the Nigerian government against pursuing a proposed $5 billion Total Return Swap (TRS) financing arrangement with First Abu Dhabi Bank. During a virtual press briefing on the 2026 Article IV Consultation Report, IMF officials described these derivatives-based structures as opaque and risky, noting that they could expose the country to margin calls if asset values drop or the currency depreciates.

The IMF advised the government to utilize more transparent alternatives, such as issuing Eurobonds or seeking concessional borrowing, stating that Nigeria maintains access to international capital markets. Additionally, the Fund urged the Central Bank of Nigeria to maintain a restrictive monetary policy to combat inflation and recommended a neutral fiscal stance for 2026. The IMF projected Nigeria's GDP growth at 4.1% for 2026 and 4.3% for 2027.

While the IMF endorsed the economic reforms of President Bola Tinubu's administration for strengthening macroeconomic stability and resilience, officials noted that these gains have not yet improved living conditions for the general population, citing food insecurity and a 63 percent poverty rate. In response, Secretary to the Government of the Federation George Akume defended the administration's reforms, acknowledging that inflation has been painful but asserting that the economy is moving in the right direction.