UAE’s largest bank considers sharing exposure to Nigeria’s $5 billion swap

First Abu Dhabi Bank PJSC (FAB), the UAE's largest lender, is contemplating sharing a portion of its exposure to Nigeria's $5 billion total-return swap with other financial institutions. According to Bloomberg, this sharing could occur through a syndication arrangement, as FAB explores the possibility of reducing its position in the transaction if there is sufficient interest from other banks.

While FAB remains committed to the transaction, it would likely retain Nigeria as the counterparty, allowing other banks to assume portions of the exposure. This arrangement could potentially generate additional fees for FAB, who would not necessarily be exiting the financing deal but rather distributing some of the financial risk.

The $5 billion swap, which FAB entered into in March 2026, was part of Nigeria's strategy to diversify its financing sources and decrease reliance on more costly borrowing methods. Nigeria's decision to pursue this instrument, along with others like Angola and Senegal, reflects a broader trend of African countries seeking lower-cost foreign-currency financing.

However, the swap has drawn attention due to concerns over transparency and potential implications for Nigeria's debt management. As Nigeria's external debt has grown to approximately $54.5 billion, the government's borrowing strategy and the structure of new financing have become increasingly scrutinized.