By 
The present administration under Bola Tinubu is anticipated to fully settle a $3.4 billion debt owed to the International Monetary Fund (IMF) during his tenure.
As earlier reported, the Nigerian Federal Government is scheduled to repay a total of $3.51 billion to the IMF between 2022 and 2026 to clear the $3.4 billion loan.
However, based on information retrieved from an IMF webpage titled ‘Nigeria: Financial Position in the Fund as of July 31, 2023,’ an outstanding balance of $3.19 billion remains to be paid off within the current administration.
In April 2020, the IMF granted Nigeria a $3.4 billion emergency financial assistance. This loan was sanctioned under the Rapid Financing Instrument by the IMF’s Executive Board on April 28. The purpose of the loan was to tackle the economic challenges resulting from the COVID-19 pandemic’s impact on the nation.
The disbursement of the loan amount occurred on April 30, 2020.
The IMF’s statement on the loan mentioned, “The IMF approved $3.4 billion in emergency financial assistance under the Rapid Financing Instrument to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.”
It has been revealed that out of four agreed loans, disbursement was only carried out for one.
In the ‘Overdue Obligations and Projected Payments to Fund’ section, a yearly breakdown of Nigeria’s expected payments is detailed. The payment amounts are stated in Special Drawing Rights (SDR). As of now, SDR1 is equivalent to $1.33 according to the IMF’s exchange rate.
In 2023, Nigeria is projected to pay SDR373.81 million ($497.17 million), encompassing principal (SDR306.81 million/$408.06 million) and interest fee (SDR67 million/$89.11 million) for the loan.
For the year 2024, Nigeria’s total payment is estimated at SDR1.32 billion ($1.76 billion), which includes a principal fee of SDR1.23 billion ($1.64 billion) and an interest fee of SDR94.76 million ($126.03 million).
The year 2025 anticipates a total payment of SDR650.58 million ($865.27 million). This includes a principal fee of SDR613.63 million ($816.13 million) and an interest fee of SDR36.95 million ($49.14 million).
Both 2026 and 2027 are expected to witness the payment of SDR25.56 million ($33.99 million) each, constituting only an interest fee. This marks the least amount during the repayment period.
It is noteworthy that the repayment deadline has been extended to 2027 from the initially reported 2026.
In total, the new administration is set to repay $3.19 billion to the IMF, implying that the preceding administration possibly paid $320 million of the loan.
The Central Bank of Nigeria (CBN) referred to the loan in its 2022 financial statements. The CBN stated, “In 2020, the Bank entered into a rapid financing instrument arrangement with the International Monetary Fund on behalf of the Federal Government of Nigeria. The loan is a 5-year tenor facility, repayable after a 2-year moratorium, and the interest rate is 1% per annum.”
The CBN additionally affirmed that repayment of the IMF loans and related charges is within its purview.
Comments