Nigeria has officially cleared its $3.4 billion emergency loan from the International Monetary Fund (IMF), marking a significant milestone in its economic recovery and fiscal responsibility. The IMF confirmed that the final repayment was completed on April 30, 2025, concluding a five-year loan cycle initiated during the COVID-19 pandemic.
In April 2020, amidst a global health crisis and plummeting oil prices that severely impacted Nigeria’s economy, the IMF extended a $3.4 billion loan under its Rapid Financing Instrument. This facility was designed to provide urgent financial assistance to countries facing balance of payments challenges without the need for a full-fledged program. The loan carried a low interest rate of 1% and was to be repaid over five years.
The repayment journey began earnestly in late 2023, with Nigeria disbursing \$401.73 million in the fourth quarter, followed by $409.35 million in the first quarter of 2024, and $404.24 million in the second quarter. By June 2024, the country’s debt to the IMF had reduced from $3.26 billion to $1.16 billion. The final installment was paid by April 30, 2025, effectively settling the debt.
Despite the completion of the principal repayments, Nigeria will continue to make annual payments of approximately $30 million in Special Drawing Rights (SDR) charges, as per IMF protocols. The successful repayment has been lauded by various stakeholders. The Tinubu Media Volunteers (TMV) commended President Bola Ahmed Tinubu’s administration for its commitment to meeting international obligations, highlighting the financial re-engineering that facilitated the timely repayments.
However, the journey was not without controversy. In early 2024, the Socio-Economic Rights and Accountability Project (SERAP) filed a lawsuit against President Tinubu over allegations that the $3.4 billion loan was missing, diverted, or unaccounted for. These allegations were based on the 2020 annual audited report by the Auditor-General of the Federation, which suggested a lack of documentation on the movement and spending of the IMF loan.l
SERAP urged the government to investigate these claims, prosecute those responsible, and recover any missing funds. The organization emphasized that servicing IMF loans allegedly missing or unaccounted for constitutes a double jeopardy for Nigerians, potentially exacerbating the country’s debt burden.
In response to the loan approval in 2020, the Nigerian government had assured the IMF of its commitment to transparency and accountability. Measures included publishing procurement plans and notices for all emergency-response activities, as well as undertaking an independent audit of crisis-mitigation spending. As Nigeria turns a new page in its economic narrative, the successful repayment of the IMF loan stands as a testament to its resilience and commitment to fiscal responsibility. However, the lingering allegations of mismanagement underscore the need for continued vigilance and transparency in public financial management.
