Nigeria has successfully repaid the principal amount of its $3.4 billion loan obtained from the International Monetary Fund (IMF), with the final installment made on April 30, 2025.
The loan, fully disbursed on April 30, 2020, was part of the IMF’s Rapid Financing Instrument, an emergency measure designed to assist Nigeria in navigating the severe economic disruptions caused by the COVID-19 pandemic. These disruptions included a sharp decline in global oil prices, a subsequent recession, and significant fiscal pressures on the Nigerian economy.
While the complete repayment of the principal sum marks a significant milestone, further examination of the IMF website reveals that Nigeria's financial obligations related to this loan are not yet fully concluded. Several charges, primarily consisting of interest, remain outstanding.
These charges are scheduled for annual repayment over the coming years. For 2025, Nigeria is obligated to pay SDR 6,548,785 (approximately $8.84 million) in May, with additional charges due in August and November. The total charge for the 2025 fiscal year amounts to SDR 22,348,146, equivalent to roughly $30.24 million.
The annual charges are projected to remain relatively consistent through 2029, ranging from SDR 25,912,903 in both 2026 and 2027 to SDR 25,924,726 in 2028, and finally SDR 25,901,079 in 2029.
Detailed analysis of these charges indicates they comprise Net SDR Charges, GRA Basic Charges, and SDR Assessments. Net SDR Charges represent the interest and associated fees levied by the IMF on member countries that have borrowed resources, denominated in Special Drawing Rights. GRA Basic Charges refer to the standard interest and fees applied to loans issued from the IMF’s General Resources Account. SDR Assessments are annual fees imposed on member countries participating in the IMF’s SDR Department.
These ongoing charges underscore the fact that despite clearing the principal debt, Nigeria will continue to incur interest payments on the loan for the next five years, extending its financial commitments to the IMF.
Despite these lingering financial responsibilities, the full repayment of the $3.4 billion principal is a noteworthy achievement for Nigeria, demonstrating progress in fulfilling its external debt obligations. It affirms the nation's capacity to meet its financial commitments on a significant international loan.
However, the continued obligation for interest payments highlights the intricate and long-term nature of managing substantial international debt. While the immediate pressure of the principal repayment has been alleviated, the recurring interest charges will necessitate careful financial planning and management in the coming years.
An earlier report indicated that Nigeria's debt servicing to the IMF in 2024 surged to $1.63 billion, which was entirely composed of principal repayments, with no interest or other charges recorded for that year. The country's total external debt servicing for 2024 reached $4.66 billion, an increase from $3.5 billion in 2023. Multilateral creditors accounted for the largest share of this at $2.62 billion, or 56 percent of the total. Notably, the IMF's share alone constituted 35 percent of Nigeria’s total external debt servicing in 2024 and approximately 62 percent of the total paid to multilateral lenders.
Furthermore, Nigeria’s overall debt to the IMF saw a significant reduction from $2.47 billion in 2023 to $800.23 million in 2024—a decrease of 67.6 percent, or $1.67 billion. This substantial drop is likely attributed to repayments made on the emergency and budget-support facility disbursed in 2020.
In conclusion, while Nigeria has successfully navigated the repayment of the principal amount of its $3.4 billion IMF loan, the nation will continue to manage ongoing interest payments over the next five years. The completion of the principal repayment is a positive indicator of Nigeria's commitment to its debt obligations, but the continued financial responsibility underscores the long-term implications of international borrowing.