Tinubu’s Borrowing Blitz – Billions in Derivatives, Surging Debt, and Lingering Questions of Transparency
As Nigeria grapples with high inflation, naira volatility, and widespread hardship, President Bola Ahmed Tinubu’s administration has aggressively expanded borrowing — conventional loans, massive domestic issuances, and now complex derivatives deals that have drawn sharp warnings from the IMF.
What began as a response to inherited fiscal woes has ballooned into a debt trajectory raising alarms about sustainability, accountability, and hidden risks.
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The $5 Billion Derivatives Deal: Opaque Swap or Necessary Lifeline?
In April 2026, Nigeria’s Senate swiftly approved a plan for up to $5 billion through a Total Return Swap (TRS) with First Abu Dhabi Bank (FAB). Under the structure, Nigeria pledges Naira-denominated securities — reportedly valued at up to 133% of the loan amount — as collateral in exchange for dollar funding. The proceeds are earmarked for refinancing costly existing debt and infrastructure projects.
This isn’t a straightforward loan. It’s a derivatives arrangement that exposes Nigeria to market swings, potential margin calls (demands for additional collateral if pledged assets decline in value), currency risks, and counterparty dynamics. Similar deals have been tapped by Senegal and Angola recently, but critics and the IMF highlight their complexity.
On June 9-10, 2026, IMF Nigeria mission chief Christian Ebeke publicly cautioned: such transactions are “often opaque and complex,” with terms not always transparent. The Fund, while praising Tinubu’s reforms (fuel subsidy removal, forex unification, tighter policy), urged caution to avoid hidden liabilities that could strain public finances later.
Key Questions Unanswered in Public Scrutiny:
– Exact pricing details, duration, and full margin-call thresholds were reportedly not deeply debated during rapid legislative approval.
– How will performance be monitored if markets turn volatile, as seen in past derivatives mishaps (e.g., Archegos echoes in broader commentary)?
– Full risk disclosure to citizens and lawmakers appears limited.
Debt Explosion Under Tinubu: Numbers vs. Narrative
When Tinubu took office in 2023, Nigeria’s public debt stood around N87 trillion (roughly $57-60 billion equivalent at prevailing rates). By December 31, 2025, the Debt Management Office (DMO) reported approximately $110.3 billion (N159.2 trillion). Critics, including opposition figure Peter Obi, cite figures approaching N200 trillion, attributing a more-than-doubling in under three years to aggressive new borrowing.
The Presidency counters that much of the naira-denominated surge stems from currency devaluation rather than pure new debt volume, while highlighting revenue gains (reportedly doubled in some metrics) and strengthened reserves. Yet debt servicing tells a stark story: $5.15 billion in 2025, projected to hit $11.6 billion in 2026 — nearly half of government revenue. This crowds out capital spending and social investment at a time when poverty remains pervasive.
Broader Borrowing Pipeline:
– Senate approval for over $21 billion in external borrowing plans for 2025-2026, targeting infrastructure, power, rail, agriculture, and security.
– Heavy domestic borrowing: Multi-trillion naira bond issuances, with overshoots reported in 2025 (e.g., N11.89 trillion borrowed vs. N10.34 trillion planned in the first three quarters).
Government Defense vs. Opposition Fire
Tinubu officials frame the strategy as pragmatic: securing cheaper or alternative funding amid high global rates and volatile Eurobond markets, while “bold reforms” stabilize the macro picture (reserves over $46-50 billion in reports, growth projections intact). The president has publicly lambasted the global financial architecture for penalizing African borrowers.
Opposition voices, notably Peter Obi, paint a darker picture of “imprudent governance” and “reckless borrowing without accountability.” Obi points to low capital expenditure relative to debt accumulation, lack of transparent utilization reports for funds, and risks of intergenerational burden ahead of future elections. He contrasts the pace with the previous administration’s accumulation.
Note that while reforms have delivered some buffers, execution gaps, revenue leakages, and oil dependency persist. The derivatives push, in particular, tests whether creative financing truly delivers productive growth or merely kicks fiscal challenges down the road.
The Bigger Picture: Risks and What’s Next
Nigeria’s debt-to-GDP and servicing ratios remain debated, but the trajectory invites scrutiny. With elections on the horizon, questions loom: Are borrowed funds visibly translating into tangible development, or are opacity and complexity shielding inefficiencies? The IMF’s intervention underscores the need for greater transparency in non-traditional instruments.
This story is evolving. Full terms of the FAB deal, detailed project audits, and updated DMO figures merit close monitoring by lawmakers, civil society, and citizens. Nigeria’s economic resilience depends not just on accessing funds, but on deploying them with rigor and public trust. For official data, consult the DMO and recent IMF assessments.
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