Nigeria has made significant strides in servicing its debt to the International Monetary Fund (IMF), repaying $1.22bn within nine months, according to external debt service data from the Debt Management Office (DMO).
The repayments, made as part of the principal for three consecutive quarters, cover the period from the fourth quarter of 2023 to the second quarter of 2024.
A detailed breakdown of the payments shows that $401.73m was disbursed in Q4 2023, $409.35m in Q1 2024, and $404.24m in Q2 2024.
These efforts have led to a substantial reduction in Nigeria’s IMF debt, which dropped by 64.42 per cent from $3.26bn in June 2023 to $1.16bn as of June 2024.
The current administration under President Bola Tinubu is tasked with repaying the $3.4bn loan obtained from the IMF in 2020 to address the economic fallout from the COVID-19 pandemic and the sharp decline in oil prices. The loan, approved under the Rapid Financing Instrument, was disbursed on April 30, 2020.
In a statement at the time, the IMF highlighted the loan’s purpose, saying, “The IMF approved $3.4bn in emergency financial assistance under the Rapid Financing Instrument to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.”
Under the repayment schedule, Nigeria is expected to pay $1.76bn to the IMF in 2024, which includes a principal fee of $1.64bn and an interest fee of $126.03m. In 2025, payments will amount to $865.27m, comprising a principal fee of $816.13m and an interest fee of $49.14m.
The repayment plan extends into 2026 and 2027, with only interest payments of $33.99m due annually during these years.
The total debt servicing commitment under the Tinubu administration is estimated at $3.19bn, indicating that the previous administration likely repaid $320m on the loan.
The Central Bank of Nigeria (CBN) has played a pivotal role in managing the loan.
In its 2022 financial statements, the apex bank noted, “In 2020, the bank entered into a rapid financing instrument arrangement with the International Monetary Fund on behalf of the Federal Government of Nigeria.
The loan is a 5-year tenor facility, repayable after a moratorium of two years and the interest rate is one per cent per annum.”
The CBN further clarified that the responsibility for repaying the IMF loan and associated charges lies with the bank.
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