IMF warns Nigeria of risks in $5 billion Abu Dhabi loan

The International Monetary Fund has warned Nigeria against proceeding with a proposed $5 billion borrowing arrangement, citing significant financial risks, even as it acknowledged the country's improved economic stability. The warning was issued on Tuesday by the IMF's Resident Representative for Nigeria, Christian Ebeke, during the presentation of the Fund's 2026 Article IV Consultation report.

The Fund expressed deep concern over a proposed Total Return Swap agreement with First Abu Dhabi Bank of the United Arab Emirates, which Nigeria's Senate approved in April 2026. The IMF described the financing structure as opaque and warned it could expose the government to margin calls if the value of the naira depreciates or interest rates rise. Ebeke stated that such instruments often lack transparency and could trigger additional liabilities under certain market conditions, potentially creating political constraints on monetary or exchange rate policy.

This caution stands in contrast to the IMF's overall positive assessment of Nigeria's economic reform program under President Bola Ahmed Tinubu. The report concluded that reforms implemented over the past two and a half years have...