Nigeria has officially completed the repayment of its $3.4 billion emergency loan from the International Monetary Fund (IMF), disbursed under the Rapid Financing Instrument (RFI) in April 2020.
The repayment, finalized on April 30, 2025, marks the conclusion of one of the largest RFI disbursements globally during the COVID-19 pandemic.
The Central Bank of Nigeria (CBN), in its latest international payments data, confirmed that a significant portion of the country’s $2.01 billion external debt service payments between January and April 2025 went toward the final settlement of this IMF facility.
The March and April 2025 payments alone accounted for nearly $1.2 billion, reflecting a heavy maturing debt schedule during the period.
According to the IMF’s Resident Representative for Nigeria, Mr. Christian Ebeke, the full principal repayment was concluded in line with the original terms.
However, Nigeria is still liable for additional annual charges of approximately $30 million linked to Special Drawing Rights (SDR), which will continue until the country’s SDR holdings align with its cumulative SDR allocation.
The SDR charges, which are calculated based on the shortfall between Nigeria’s SDR holdings (SDR 3,164 million or $4.3 billion) and its total allocation (SDR 4,027 million or $5.5 billion), will be assessed using the prevailing SDR interest rate, updated weekly by the IMF.
While the IMF facility helped Nigeria absorb the fiscal shocks from the pandemic and oil price collapse in 2020, the repayment adds to the rising external debt service burden in recent years.
In 2024, Nigeria paid $1.63 billion to the IMF alone, all of which were principal repayments with no interest or charges included.
The country’s total external debt service rose to $4.66 billion in 2024, up from $3.5 billion in 2023, with multilateral creditors accounting for over 56 percent of the total.
The IMF represented 35 percent of external repayments during the same period.
Fitch Ratings, in a recent note, projected that Nigeria’s external debt servicing will rise to $5.2 billion in 2025, driven by $4.5 billion in amortisation payments and a $1.1 billion Eurobond repayment due in November.
The agency also flagged a minor delay in the payment of a Eurobond coupon in March 2025, attributing it to ongoing challenges in public finance management.
Despite completing the IMF repayment, Fitch warned that Nigeria’s interest burden remains elevated due to weak revenue performance.
The rating agency estimates that the federal government’s interest-to-revenue ratio will hover near 50 percent, while the general government’s ratio will average over 30 percent through 2026.
Nigeria’s debt-to-GDP ratio is expected to remain moderate at around 51 percent; however, Fitch expressed concern over structural revenue constraints, forecasting general government revenue to remain below 14 percent of GDP over the next two years.
As Nigeria continues to navigate tightening global credit conditions and elevated domestic fiscal pressures, policymakers face growing calls to expand revenue mobilisation and strengthen expenditure efficiency to manage future debt obligations.
The IMF has reiterated the importance of enhancing domestic resource mobilisation, improving tax administration, and curbing leakages as necessary steps to ensure long-term debt sustainability.
While the completion of the IMF loan repayment offers temporary relief to Nigeria’s external liabilities, the recurring SDR charges and upcoming Eurobond maturities underscore the need for sustained fiscal reforms to stabilise public finances and safeguard external reserves.
