Nigeria pays Off $3.4 Billion IMF Covid-19 loan, exits debtor list

Nigeria has fully repaid the $3.4 billion it borrowed from the International Monetary Fund (IMF) at the height of the Covid-19 pandemic, effectively exiting the list of countries indebted to the Washington-based lender.

Finance Minister Wale Edun confirmed the repayment via text message on Thursday, stating that the loan was settled according to the agreed terms.

The IMF had granted Nigeria emergency financial assistance in April 2020 as the pandemic caused widespread economic disruption globally.

With this repayment, Nigeria now has no outstanding debt to the IMF.

However, Christian Ebeke, the IMF resident representative for Nigeria, noted in a separate statement that Nigeria is still expected to honor approximately $30 million annually in Special Drawing Rights charges.

Despite these ongoing charges, the repayment signifies an improvement in Nigeria’s financial standing.

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The Central Bank’s net foreign exchange reserves reached a three-year high last month, indicating increased dollar liquidity.

Nigeria has been actively working to improve its foreign exchange liquidity after years of a fixed exchange rate regime that led to an overvalued naira.

President Bola Tinubu’s decision to float the naira after assuming office in 2023, as part of broader economic reforms, has contributed to the currency losing over 70% of its value against the dollar.

The IMF recently commended Nigeria’s economic reforms, acknowledging that they have positioned the country better to navigate external economic challenges.