By Adefolarin A. Olamilekan
The International Monetary Fund’s (IMF) Resident Representative to Nigeria, Mr. Christian Ebeke, has officially clarified that Nigeria has fully repaid its $3.4 billion Rapid Financing Instrument (RFI) loan, originally disbursed in April 2020 to cushion the economic impact of the COVID-19 pandemic.
At the time, Nigeria—like many other nations—faced economic paralysis. The pandemic brought the global economy to a halt, oil prices crashed, government revenues plummeted, and millions of jobs were on the line.
In response, the IMF Executive Board approved Nigeria’s emergency loan request — equal to 100% of the country’s quota — to shore up the economy, protect jobs and businesses, and provide a buffer for healthcare spending during the crisis.
The loan, granted under the IMF’s Rapid Financing Instrument, also aimed to stabilize foreign reserves and ease Nigeria’s balance of payments challenges amid the oil price shock.
Fast forward to April 30, 2025 — five years later — Nigeria cleared the principal on the RFI facility. According to Mr. Ebeke, the country’s principal balance is now zero, although interest and related charges remain, totaling approximately SDR 125.99 million (around ₦275.28 billion at current exchange rates).
The Special Drawing Right (SDR) is an international reserve asset maintained by the IMF and reflects a claim to currency held by IMF member countries.
Celebration Meets Caution
The Tinubu-Shettima administration has heralded the repayment as a milestone of fiscal discipline and economic reform, with officials describing it as evidence of a “strategic financial reset.”
However, mixed reactions have greeted the announcement. Critics and economists warn that celebration may be premature, particularly given the broader fiscal reality Nigeria faces.
Indeed, Nigeria’s total public debt (domestic and external) currently stands at over ₦144.67 trillion, according to the Debt Management Office (DMO). While clearing the IMF loan is notable, interest obligations alone on the RFI facility exceed ₦200 billion, and Nigeria remains heavily indebted to multilateral lenders, including the World Bank and African Development Bank (AfDB).
Debt Sustainability Still A Concern
Economists argue that the real challenge is not just repayment but the sustainability of Nigeria’s debt strategy.
“We must double down and reduce our borrowing profligacy,” said a leading fiscal analyst. “Our external debts, in particular, are more complex to manage and service than local obligations.”
With oil revenues under pressure and fiscal deficits widening, the federal government is reportedly planning additional borrowings — possibly from the World Bank — to finance budget shortfalls and infrastructure gaps.
This ongoing debt accumulation raises fundamental concerns about fiscal sustainability, particularly as a large portion of borrowed funds are either misused or lost to corruption in public service delivery.
The Path Forward: Fiscal Consolidation and Accountability
Going forward, Nigeria must prioritize fiscal consolidation, improve transparency in loan utilization, and ensure that future borrowings are directed toward productive investments — especially infrastructure projects with measurable economic returns.
“Our loans must be committed to projects that will enhance productivity in the economy,” noted a policy expert. “That should be our national priority.”
The repayment of the IMF loan may signal improved fiscal discipline, but it does not erase the larger challenge: how to build a self-sustaining economy with reduced reliance on foreign debt.
Final Thoughts
While the repayment of the COVID-19-era IMF loan deserves acknowledgment, Nigerians must remain clear-eyed. The country’s debt overhang remains daunting, and there’s still much work to do to achieve fiscal balance, institutional efficiency, and inclusive economic growth.
As the saying goes — it is not yet Uhuru.
