Nigeria Fully Repays $3.4bn IMF COVID-19 Loan Principal, Faces Ongoing Interest Charges

Nigeria has officially completed the repayment of the $3.4 billion loan it secured from the International Monetary Fund (IMF) at the height of the COVID-19 crisis. The loan, received on April 30, 2020, through the IMF’s Rapid Financing Instrument, was meant to cushion the economy against pandemic shocks such as plummeting oil prices and fiscal shortfalls. According to The PUNCH, the final principal repayment was made on April 30, 2025, marking a milestone in the country’s debt repayment efforts.

Although the principal has been settled, Nigeria is not entirely free of obligations tied to the loan. There are still several IMF charges that must be paid over the next few years. These charges include interest and other associated fees, which Nigeria will continue to pay annually until 2029. For 2025 alone, the total due in charges is about $30.24 million, with scheduled payments spread across May, August, and November.

The breakdown of these charges reveals three main components: Net SDR Charges, GRA Basic Charges, and SDR Assessments. These are standard IMF practices applied to loans disbursed from its General Resources Account and Special Drawing Rights (SDR) frameworks. While not part of the principal, these charges represent the cost of borrowing and are a long-term financial obligation.

Even as Nigeria celebrates the repayment milestone, the reality of ongoing financial commitments remains. The IMF interest charges will amount to over $25 million each year through 2029, reflecting the complexity of international borrowing. These costs serve as a reminder that while emergency funds help in times of crisis, they also carry extended financial implications that must be carefully managed.

Notably, Nigeria’s total debt servicing to the IMF in 2024 reached $1.63 billion — all of it directed at the principal, with interest charges yet to begin. External debt servicing for that year hit $4.66 billion, a sharp rise from 2023’s $3.5 billion. The IMF accounted for 35% of all external debt servicing and over 60% of multilateral repayments. As of 2024, Nigeria’s debt to the IMF dropped to $800.23 million, showing steady progress, but also emphasizing the long road ahead in managing debt sustainability.