The Federal Government of Nigeria has successfully repaid its debt to the International Monetary Fund (IMF), prompting the global financial institution to officially remove Nigeria from the list of countries with outstanding obligations.
This development follows the final repayment of the principal amount of its $3.4 billion loan obtained under the IMF’s Rapid Financing Instrument (RFI). The loan, disbursed in April 2020, at the peak of the COVID-19 pandemic, was designed to provide emergency support for Nigeria’s battered economy, which at the time faced a sharp decline in oil revenues, rising fiscal deficits, and a looming recession.
IMF's latest records, released on May 7, 2025, showed that Nigeria is no longer on its debtors' list, which includes 91 countries, following the full settlement of the principal.
However, Nigeria still has interest-related charges, including interest and administrative fees, which will continue on an annual basis until 2029. IMF said that Nigeria’s total charge for 2025 is expected to reach SDR 22.35 million (approximately $30.24 million), with payments scheduled across May, August, and November. The charges will remain consistent through 2029, with annual payments for each year ranging from SDR 25,912,903 in 2026 and 2027 to SDR 25,924,726 in 2028 and SDR 25,901,079 in 2029. The charges include Net SDR Charges, GRA Basic Charges, and SDR Assessments.
The IMF’s removal of Nigeria from its list of debtor countries is seen as a significant step toward improving the country’s credit profile and international financial reputation.
Nigeria's efforts to clear its debts According to IMF data, Nigeria’s outstanding debt to the fund dropped significantly from $2.47 billion in 2023 to $800.23 million in 2024, before being fully cleared in 2025.
The repayments were part of a broader debt servicing strategy that saw Nigeria spend $4.66 billion on external debt obligations in 2024 alone, an increase of 167% from N2.57 trillion recorded in the previous year. The increase in debt servicing costs is due to increasing global interest rates and the naira depreciation, which made dollar loans more expensive.
A public finance analyst with expertise in fiscal policy, Desire Bobmanuel, has described Nigeria’s repayment of its IMF debt as a positive signal for the country’s economic outlook. “The repayment of any sovereign debt, and in this case, particularly denominated in foreign currency, can only be good for Nigeria,” he told Legit.ng. He explained that the development shows growing confidence in Nigeria’s economy, and progress in key areas of policy and reform: “Such repayment is an indication of increasing underlying economic strength, growing macroeconomic confidence, fiscal responsibility, and monetary policy effectiveness.”
It demonstrates improving policy credibility and establishes ongoing reforms as being effective in the aggregate.” He also noted potential long-term benefits for the naira and government spending capacity. “If this continues, confidence in the Naira should improve, and that should translate into gains in the exchange rate in favor of the Naira. Borrowing costs should begin to come down gradually, which should expand the fiscal space by stretching the capacity of the Naira to procure goods and services, particularly public goods and services.”
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