In a significant development that reflects Nigeria’s efforts toward fiscal responsibility and economic recovery, the International Monetary Fund (IMF) has officially confirmed that Nigeria has fully repaid the $3.4 billion loan it received in 2020 to cushion the impact of the COVID-19 pandemic.
The IMF loan, disbursed under the Rapid Financing Instrument (RFI), was aimed at helping Nigeria navigate the twin challenges of an economic recession and sharp decline in global oil prices during the peak of the pandemic. According to a statement released by the IMF Resident Representative for Nigeria, Mr. Christian Ebeke, the final tranche of the repayment was completed on April 30, 2025.
“As of April 30, 2025, Nigeria has fully repaid the financial support of about $3.4bn it requested and received in April 2020 from the International Monetary Fund under the Rapid Financing Instrument,” the IMF said. “This support helped alleviate the impact of the COVID-19 pandemic and the sharp fall in oil prices.”
While the loan repayment marks a major milestone for Africa’s largest economy, the IMF also noted that Nigeria will continue to make additional annual payments in the form of Special Drawing Rights (SDR) charges. These charges, estimated at about $30 million annually, are expected to continue until Nigeria’s SDR holdings align with its cumulative SDR allocation.
Special Drawing Rights are international reserve assets allocated by the IMF to supplement member countries’ official reserves. Nigeria currently holds SDR 3,164 million (approximately $4.3 billion), compared to its total allocation of SDR 4,027 million ($5.5 billion). The charges are calculated based on the SDR interest rate, which is updated weekly.
According to the IMF, Nigeria’s total charge for 2025 is projected to reach SDR 22.35 million (around $30.24 million), with scheduled payments spread across May, August, and November.
The repayment comes amid rising concerns about Nigeria’s growing external debt burden, which surged to $41.59 billion by the end of 2024. Debt servicing costs also climbed, with Nigeria paying $4.66 billion in external debt servicing in 2024 alone—up from $3.5 billion in 2023. The IMF accounted for 35 percent of the country’s total external debt payments last year.
Despite Nigeria’s ballooning public debt, the IMF’s confirmation of the full loan repayment is seen by analysts as a vote of confidence in Nigeria’s commitment to meeting its financial obligations. The RFI disbursement to Nigeria was one of the largest globally during the pandemic, and it came with minimal conditionality compared to traditional IMF programmes.
“This repayment helps position Nigeria more favourably in the international financial system, especially as the country seeks further investments and support from multilateral lenders,” said a Lagos-based economic analyst, Adedayo Johnson. “However, the continuation of SDR charges serves as a reminder that financial prudence and debt sustainability remain critical going forward.”
The Nigerian government, under President Bola Tinubu, has committed to implementing fiscal and structural reforms aimed at reducing dependence on borrowing. These include subsidy reforms, efforts to increase non-oil revenue, and improved public financial management.
Additionally, the Debt Management Office (DMO) has emphasised a shift toward concessional loans with lower interest rates and longer repayment terms. The completion of the IMF repayment also comes at a time when Nigeria is negotiating new financing deals, including a $2.5 billion World Bank loan for fiscal support and infrastructure investment.
While Nigeria’s successful repayment of the IMF’s COVID-19 support loan is a noteworthy accomplishment, the country must remain vigilant in managing its debt portfolio amid economic uncertainty and fluctuating oil revenues. The annual SDR charges, though smaller in scale, underscore Nigeria’s continued engagement with the IMF and the importance of maintaining strong foreign reserve buffers and sound macroeconomic policies.