Nigeria has paid off the full principal of its $3.4 billion loan from the International Monetary Fund (IMF), with the last payment made on April 30, 2025. This loan, given in April 2020 as part of IMF’s Rapid Financing Instrument (RFI), was meant to help mitigate the negative effects of the COVID-19 pandemic on the economy, including declining oil prices and a recession.
Loan Repayment Timeline and Structure:
The loan amounts $3.4 billion approximately 2.4545 billion Special Drawing Rights (SDRs) was arranged with a five year tenor and moratorium of 3.25 years allowing Nigeria to start repayments in the third quarter of 2023. The repayment schedule was as follows:
- 2023 – SDR 613.62 million
- 2024 – SDR 1.22 billion
- 2025 – SDR 613.62 million
By May 7, 2025, Nigeria had cleared the entire principal amount, reaffirming its commitment to international financial obligations.
Ongoing Interest and Charges:
Even though Nigeria paid off the principal amount, it still incurs ongoing yearly costs on the loan, primarily Net SDR Charges, General Resources Account (GRA) Basic Charges and SDR Assessments. The loan charges will continue thereafter until 2029 and will stay between SDR 22 million to SDR 25.9 million, annually.
Economic Implications and Outlook:
By making this principal repayment, Nigeria achieves an immediate improvement in fiscal credibility that could advance its credit rating or shape investor confidence in the future. The remaining interest obligations remind all players of the importance of the management of debts, and the necessity of implementing mitigations for these long-term exposures.
As Nigeria works its way out of the economic recovery from the COVID-19 pandemic, the experience shows how important it is to have good transparency in financial management, and the need to balance accessing emergency funds and long-term debt sustainability.
