The global financial services industry is in the process of transiting from the utilization of the London Interbank Offered Rate (“LIBOR”) benchmarks. Accordingly, borrowers and lenders across the globe are navigating the transition from LIBOR to risk-free rates (“RFRs”). The Nigerian financial market is not excluded from this transition.

In Nigeria, LIBOR is used in both local and cross border lendings, many of which will be affected by the transition. With the impending end of LIBOR, it is therefore important for contractual parties in the Nigerian financial market to consider alternatives to LIBOR, the legal implications and challenges for a LIBOR transition in Nigeria, and recommendations for a successful transition. However, for facilities where the currency of the transaction is the Nigerian Naira, the cessation of LIBOR poses no issue as the reference rate will remain the Nigerian Interbank Offered Rate (“NIBOR”) or other agreed benchmark.

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