The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has confirmed that Nigeria has drawn the first $1.5 billion under its $5 billion financing arrangement with First Abu Dhabi Bank (FAB), explaining that the government deliberately structured the facility to reduce borrowing costs by accessing funds only when required.

Speaking on the sidelines after the Federal Executive Council (FEC) meeting in Abuja yesterday, Oyedele said the facility, which had received legislative approval, was designed to refinance costly debt, fund infrastructure projects and support budget implementation.

“The approval for that loan went to the National Assembly, so everybody is aware of it. It’s for refinancing of expensive debts, financing of infrastructure, as well as budgets. So, we don’t want to start making press releases each time we do a draw down. It is not different from any other loan,” he said.

His remarks constitute the first official confirmation of the initial drawdown reported last week.

A Bloomberg report had cited people familiar with the transaction, to have Nigeria had accessed approximately $1.5 billion over the past two weeks through a Total Return Swap with First Abu Dhabi Bank, marking the first utilisation of the broader $5 billion financing package.

The minister said the government intentionally opted for a phased disbursement structure instead of drawing the entire facility at once, saying the approach would minimise financing costs and improve debt management efficiency.

“So, the loan is meant to be a draw down in tranches, and one of the advantages of that is, if you, if you need $5 billion and you take everything at once, you start paying interest, even though you’re not spending all of it now. “So, 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.” (THISDAY)