Financial Strategy

Nigeria is once again at a critical juncture in its debt trajectory, as mounting fiscal pressures, rising borrowing costs, and constrained access to conventional financing channels push the government toward increasingly complex and opaque instruments. Recent reports indicate that Nigeria is considering a $5 billion Total Return Swap (TRS) arrangement with First Abu Dhabi Bank, marking a significant shift in its debt management strategy. This development must be situated within a broader pattern of an increasing appetite for this credit derivative in the form of Total Return Swaps. Both Angola and Senegal have in the recent past also been reported to have entered into Total Return Swaps. These developments point to a deepening reliance on financial engineering solutions that may provide short term liquidity but carry significant long-term risks for fiscal stability and public accountability.

The African Sovereign Debt Justice Network, (AfSDJN), is a coalition of citizens, scholars, civil society actors and church groups committed to exposing the adverse impact of unsustainable levels of African sovereign debt on the lives of ordinary citizens. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid. Focusing in particular on Kenya, Zambia, Zimbabwe, Mozambique, Nigeria and Senegal, the AfSDJN will also amplify African voices and decolonize narratives on African sovereign debt . Its activities include producing research outputs to enhance the network’s advocacy interventions. It also seeks to create awareness on and elevate the priority given to sovereign debt and other economic justice issues on the African continent and beyond throughout 2021.