The Federal Government’s outstanding guarantees and contingent liabilities climbed to N7.84tn as of 30 June, 2026, with collateral pledged for a $1.5bn foreign-exchange swap arrangement accounting for more than a third of the total exposure.
Data from the Debt Management Office show that the collateral for the Total Return Swap with First Abu Dhabi Bank was valued at N2.74tn, representing 34.99 per cent of the government’s reported guarantees and contingent liabilities.
“These are potential debts you may have to pay if something happens. The figures here highlight the scale of financial commitments tied to government-backed transactions, power-sector agreements, development finance and infrastructure projects, adding to the fiscal risks confronting the country,” said an emerging markets analyst, Ike Ibeabuchi.
“Although contingent liabilities do not necessarily translate into immediate government expenditure, they can create additional pressure on public finances if the underlying borrowers or projects fail to meet their obligations or the guarantees are called.”
The $1.5bn swap collateral was the single largest item in the DMO’s breakdown. The government drew the amount from a $5bn swap arrangement and backed the transaction with Federal Government bonds maturing in May 2032, carrying a coupon of 16.9556 per cent.
Power-sector obligations represented another major source of exposure. Contingent liabilities arising from Put-Call Option Agreements for several power projects stood at N1.88tn, accounting for 23.93 per cent of the total.
The agreements cover the Azura-Edo Independent Power Project, Calabar National Integrated Power Project, Afrinergia Power Limited and CT Cosmos, according to the DMO report.
A separate N329.80bn was recorded under Partial Risk Guarantees for power projects, equivalent to 4.21 per cent of the total. The underlying figures for both categories were provided by Nigeria Bulk Electricity Trading Plc.
The government also guaranteed N501.02bn under the first series of NBET’s N4 trillion Power Sector Bond Issuance Programme. The programme was established through a special-purpose vehicle to settle outstanding obligations to electricity generation companies.
Outside the power sector, the Bank of Industry accounted for N1.18tn in government-guaranteed exposure, representing 15.04 per cent of the total. The guarantee relates to the development bank’s €750m Eurobond.
The Lekki Deep Sea Port project, through Lekki Port LFTZ Enterprise, accounted for another N804.96bn, or 10.27 per cent of the reported liabilities.
The DMO also listed N374.88bn in pension arrears owed by Ministries, Departments and Agencies, reflecting another category of financial obligations facing the government.
Other guarantees included N5.24bn for the Federal Mortgage Bank of Nigeria and N25.35bn for the Nigeria Mortgage Refinance Company.
The latter supports long-term mortgage financing through capital-market notes used to refinance or purchase mortgages originated by eligible lenders. Of the N440bn guarantee available to the company, N29bn had been utilised, the DMO said.
The guarantee figures come amid substantial debt-servicing costs for the Federal Government.
The N7.84tn in guarantees and contingent liabilities is distinct from the government’s direct debt stock. However, the size of the exposure shows that fiscal risks extend beyond money already borrowed and scheduled for repayment.
Nigeria’s total public debt reached N166.79tn as of 30 June, 2026. Nigeria spent N5.28tn servicing its domestic debt between January and June 2026, as interest payments on government securities continued to absorb substantial public funds.