Says Tinubu’s reforms yielding gains but poverty, food insecurity remain high
Urges FG to publish terms, drawdowns, collateral, utilisation of facility
Queries N11.85tn borrowing, N30.64tn govt spending
Says naira lost 29% value in four years
Emmanuel Addeh in Abuja
The Alliance for Economic Research and Ethics has raised concerns over the transparency and risk implications of the federal government’s $5 billion Total Return Swap facility with First Abu Dhabi Bank, urging the government to disclose the material terms of the financing arrangement.
The group, in an analysis of the economic reforms scorecard recently presented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the facility involved public institutions, public collateral and public repayment obligations and should therefore be subjected to adequate public scrutiny.
The analysis, titled: “The $5 Billion Abu Dhabi Financing: A Scorecard of Transparency, Risk and the Road Ahead”, was released by the organisation following Oyedele’s presentation of the government’s “Nigeria’s Economic Reforms: By the Numbers” scorecard on Wednesday.
The group led by a former President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and ex-Chairman of the Organised Private Sector of Nigeria (OPSN), Dele Oye, argued that some of the figures required greater context and clearer distinctions between revenue, borrowing, projections and independently verified outcomes.
According to the analysis, the Ministry of Finance reported approximately N20.4 trillion in incremental federal government resources arising from the reforms, comprising N5.43 trillion in the federal government’s estimated share of subsidy savings, N3.12 trillion in other incremental revenues and N11.85 trillion in incremental borrowing.
It noted that borrowing accounted for about 58 per cent of the stated incremental resources, stressing that the figure should therefore not be presented as N20.4 trillion of “free cash” generated by the reforms.
“Borrowing is financing, not internally generated revenue. The better statement is that the reforms created fiscal space and changed the financing mix; they did not generate N20.4 trillion of free cash,” it stated.
The organisation also drew attention to the government’s estimate of N30.64 trillion in additional expenditure pressures, including N9.39 trillion for wage adjustments, wage awards, allowances and related personnel costs; N9.37 trillion arising from the exchange-rate impact of external debt service; N6.47 trillion for strategic infrastructure; and N3.14 trillion for electricity support.
It said the figures presented a mixed fiscal picture, with the government having reduced a major subsidy burden while simultaneously increasing spending on wages, infrastructure and other obligations and relying substantially on borrowing.
The group argued that the more important question was whether the reforms had made Nigeria’s fiscal system more resilient and productive while providing adequate protection for vulnerable households.
On inflation, the organisation noted the decline in headline inflation but cautioned that disinflation should not be confused with a reduction in the overall price level.
It said the ministry had highlighted headline inflation of 15.91 per cent in June 2026, while the National Bureau of Statistics (NBS) subsequently reported 15.43 per cent in July, with food inflation at 20.31 per cent.
“The direction is encouraging. The lived experience remains difficult,” it stated, arguing that the government’s economic scorecard should also track food inflation, real wages, employment quality and poverty.
The group said stronger foreign reserves and improved foreign exchange market stability were positive developments but warned against treating reserves as ordinary budget revenue.
It noted that the government’s reserve position should be accompanied by clear information on the definition and date of the reserve figure, as well as the extent to which assets were freely available or affected by external obligations and financing arrangements.
On the government’s counterfactual argument that failure to implement the reforms could have resulted in more severe economic dislocation, the organisation said the risks were credible but cautioned that a counterfactual remained a policy model rather than an established historical fact.
It said the government should disclose the assumptions underlying its “no reform” scenario and explain the alternative sequences of reforms and social protection measures that were considered.
Turning specifically to the Abu Dhabi facility, the organisation criticised the government’s response to questions over its disclosure.
Oyedele had said the government would not publish details of how it was spending funds from the facility, insisting that it would publish how it spent government money and that there was “nothing special about that loan.”
The group described that position as the weakest part of the government’s communication on the facility. It argued that although the transaction might have been commercially structured, it involved a sovereign counterparty, public collateral and public repayment obligations and therefore had a clear public-interest dimension.
“The public scorecard reviewed for this article does not contain a dedicated facility-level disclosure covering the reported drawdown, collateral, triggers, pricing, fees, counterparty obligations and use of proceeds,” it stated.
According to the organisation, the absence of such disclosure did not by itself establish illegality or misconduct but made the government’s position difficult to defend.
It urged the government to publish a redacted term sheet or authoritative summary of the facility, including the drawdown schedule, purpose of funds, collateral framework, margin-call provisions, fees and periodic utilisation reports.
The group also rejected the argument that the Abu Dhabi facility should not receive special scrutiny simply because other government borrowings, including World Bank loans, Eurobonds and Sukuk, had not attracted similar demands.
It argued that Total Return Swaps had distinct financing, derivative and collateral features that warranted an appropriate disclosure framework.
“The question is not whether the facility is uniquely suspicious. The question is whether it is sufficiently different to require a different disclosure template,” it said.
The organisation also acknowledged the importance of the National Assembly’s approval of the facility but argued that legislative approval should not be equated with continuous public accountability.
It said approval answered whether the government had obtained legislative authority to proceed but did not necessarily provide the public with information on how much had been drawn, the collateral pledged, possible triggers for accelerated repayment, effective financing costs or how proceeds had been utilised.
On the government’s claim that the facility’s all-in cost was lower than the cost of existing government borrowing, the group said the assertion could be commercially plausible but could not be independently tested without the full terms and a like-for-like benchmark.
It noted that reported pricing of the facility was linked to Secured Overnight Financing Financing Rate (SOFR), meaning its cost could change as the benchmark interest rate changed.
The organisation said any proper comparison should take account of interest and fees, the opportunity cost of pledged securities, margin-call and early-termination risks, tenor, break clauses, refinancing risk, currency exposure and the cost of alternative financing available when the transaction was executed.
It therefore described the government’s claim as “unverified but testable”, rather than either established savings or evidence of overpricing.
On the phased drawdown of the facility, the organisation agreed with the government’s argument that accessing the funds in stages could help avoid unnecessary financing costs.
However, it called for clear rules governing the drawdowns, including the triggers for each tranche, the projects or refinancing needs justifying them, the treatment of drawn but unspent funds, collateral revaluation and circumstances that could trigger margin calls or early termination.
The group nevertheless acknowledged some aspects of the government’s broader transparency efforts, including the economic reforms scorecard and its attempt to explain the fiscal implications of subsidy removal.
It said the ministry deserved credit for acknowledging that the reforms had imposed significant short-term pressure on households and for attempting to present a “follow the money” framework.
It also welcomed the reported commitment by the minister to produce a dedicated frequently asked questions document on the First Abu Dhabi Bank facility.
The organisation recommended that the government publish the material terms of the Total Return Swap, including the facility amount, tenor, tranche structure, drawdown schedule, pricing, fees, collateral arrangements, valuation methodology, margin-call and early-termination triggers and the purpose of each drawdown.
It further called for quarterly utilisation and risk reports and the incorporation of derivative-based financing, collateralised borrowing and contingent liabilities into the government’s broader economic scorecard.
The group also urged the National Assembly and relevant oversight institutions to receive regular reports on drawdowns, collateral and utilisation, while calling for access to underlying records by the Debt Management Office and authorised audit and oversight institutions.
It said Nigeria should strengthen fiscal reporting, public financial management and risk frameworks while maintaining the gains recorded in macroeconomic stability.
“Transparency is a journey, but every journey needs signposts. A signpost that says ‘trust us’ is not yet a map,” it stated.
The organisation also called for the institutionalisation of the economic reforms scorecard, with an annual publication calendar, clear baselines and targets, independent technical notes and, where practicable, independent audit or review.
It recommended a broader and more efficient tax base rather than indiscriminate pressure on informal workers and small businesses, as well as stronger social protection to ensure that macroeconomic stabilisation translated into improved household welfare.
Concluding, the group said the government’s reform story contained both genuine gains and significant unresolved challenges.
“Nigeria has made progress in fiscal communication, inflation reduction, reserve accumulation, exchange-rate functioning, revenue mobilisation and financial discipline,” it stated, while stressing that poverty, food insecurity, complex financing and weak fiscal reporting remained serious concerns.
It said the government’s N15.8 trillion federation-wide subsidy savings, N20.4 trillion in federal incremental resources and N30.64 trillion in additional expenditure pressures should be subjected to public examination and clearly categorised according to what constituted revenue, borrowing, projections and independently verified outcomes.
The organisation said the commercial purpose of the facility might be legitimate and its structure could provide liquidity and refinancing benefits, but argued that collateral and margin-call features could also create risks that should not be concealed by describing the facility as flexible.
In another statement, Oye said the naira value held by Nigerians has declined by almost one-third in real terms over four years despite the Central Bank of Nigeria’s (CBN) report that currency-in-circulation rose to a record N5.73 trillion in 2025.
Oye said the increase in physical cash in circulation should not be interpreted as evidence of stronger economic activity, arguing that inflation had significantly eroded the purchasing power of Nigerians’ cash holding by as much as 29 per cent.