Nigeria is on course to fully repay its International Monetary Fund (IMF) Rapid Financing Instrument (RFI) loan by 2029, marking a key milestone in the country’s recovery from the COVID-19-induced economic crisis of 2020.
In April 2020, the IMF approved emergency support worth 2,454.50 million Special Drawing Rights (SDR), roughly equivalent to $3.32 billion at the current exchange rate of SDR1 to $1.35404 as of May 1, 2025. The support came at a time when Nigeria was grappling with plunging oil prices, capital flight, and widespread macroeconomic shocks triggered by the pandemic.
As per the repayment schedule published on the IMF website, Nigeria’s repayment timeline begins in 2025 and concludes in 2029. This year, the country is expected to make its final principal payment of SDR 306.81 million, along with charges and interest of SDR 22.81 million, bringing total payments in 2025 to SDR 329.62 million, or about $446.21 million.
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From 2026 to 2029, remaining repayments will consist mainly of annual interest and charges, each year estimated at SDR 26.7 million, amounting to approximately $36.14 million annually. In total, Nigeria will pay back SDR 436.42 million ($590.78 million) over the five-year period.
Earlier in 2024, Nigeria paid a substantial $1.63 billion to the IMF, made up entirely of principal payments on past disbursements, which contributed to a 67.6 percent reduction in the country’s debt to the Fund—from $2.47 billion in 2023 to $800.23 million in 2024.
This reduction came against the backdrop of increased external debt servicing, which rose to $4.66 billion in 2024, compared to $3.5 billion in 2023. Multilateral creditors, led by the IMF, accounted for the largest share of that burden.
Unlike traditional IMF loans, the RFI support came with minimal conditionalities and was disbursed in full immediately. The absence of policy strings made it a quick-response tool during the pandemic but also raised concerns among some observers then about how judiciously the funds would be used.
Those concerns haven’t entirely disappeared.
Despite Nigeria’s progress in repayment, critics warn that structural issues, particularly endemic corruption, weak transparency mechanisms, and the absence of institutional accountability—continue to raise doubts about how such emergency funds were deployed and whether they achieved their intended impact.
Moreover, while the IMF commended Nigeria’s macroeconomic reforms and its effort to meet repayment obligations without refinancing or restructuring, governance challenges remain. President Bola Tinubu’s administration has pushed through key reforms, including the elimination of petrol subsidies, exchange rate unification, and steps to improve tax revenue collection.
However, the macroeconomic gains from these reforms are yet to trickle down meaningfully. Inflation remains high at 24.23 percent as of March 2025, and purchasing power for many Nigerians continues to decline. Debt servicing costs still crowd out critical development spending, and social safety nets remain inadequate.
Still, global institutions appear to be betting on Nigeria’s reform momentum. Both the IMF and World Bank project modest economic growth in the near term, with the latter expecting a 3.6 percent expansion in 2025, slightly ahead of the IMF’s 3.0 percent forecast. The country’s external reserves have remained stable due to improved oil earnings and diaspora remittances. A current account surplus is also anticipated by 2026.
The IMF has praised Nigeria’s strides in macroeconomic stability, but it has also issued a note of caution, urging more aggressive structural reforms and stronger anti-corruption safeguards to consolidate gains.
Analysts note that Nigeria’s ability to wrap up its IMF loan by 2029 would indeed improve its international credit profile, potentially easing access to global capital markets. But repayment, in itself, is not a sign of long-term recovery. For that to happen, Nigeria has been urged to diversify its economy, build infrastructure, eradicate systemic corruption, and create a friendly business environment.