Nigeria may have been removed from the International Monetary Fund’s (IMF) debtors list, but reports suggest the country still has financial obligations to the global lender, particularly in the form of interest payments.
Earlier this week, news that Nigeria had fully repaid the $3.4 billion emergency loan it secured to manage the economic fallout from the COVID-19 pandemic sparked jubilation. The country was officially cleared from the IMF’s debtors list, a move confirmed in the IMF’s May report.
However, a deeper look reveals that Nigeria’s financial obligations to the IMF are far from over. While the country may have cleared the principal debt, it still faces millions of dollars in outstanding charges, categorized by the IMF as “charges” or interest. These charges will continue to accumulate through 2029.
The Foundation for Investigative Journalism (FIJ) reported that Nigeria still owes approximately SDR 125.99 million (Special Drawing Rights), an amount representing the interest due on the loan from now until 2029. This includes an immediate payment of SDR 22.35 million in 2025, followed by an annual charge of roughly SDR 25.9 million from 2026 to 2029. These payments are due quarterly under the original loan agreement.
Despite the fact that Nigeria’s principal repayment was finalized in April 2025, the interest continues to accrue, with the IMF projecting a substantial financial burden in the coming years.
According to the IMF’s financial details, which were published in a report titled “Total IMF Credit Outstanding – Movement from May 01, 2025 to May 06, 2025,” Nigeria was notably absent from the list of debtor nations. As of May 6, 2025, the IMF’s total outstanding credit amounted to over $117 billion, owed by 91 developing nations.
However, as is typical with loans, the repayment of principal is only one aspect of the financial agreement. Interest, which is calculated based on the loan’s duration, remains due until the full settlement of all charges. In Nigeria’s case, this means continued payments through 2029.
The IMF’s standard charges on its loans include a service fee, which was set at 0.5% upfront, along with ongoing interest determined by the Special Drawing Rights (SDR) rate. As of May 2025, the SDR rate stood at 3.0%, with an added margin of 0.6%, bringing Nigeria’s effective interest rate to 3.6% annually.
These charges, while not immediately obvious, are part of the original agreement that Nigeria entered into with the IMF, which means the country is still bound by these financial obligations despite the loan’s principal repayment.
In response to public confusion surrounding the loan repayment, Otega Ogra, a senior special adviser to President Tinubu, clarified that while Nigeria had cleared the emergency loan, the interest payments remain part of the agreement.
The IMF’s projections reveal that Nigeria’s financial responsibilities will remain in place until 2029, a fact that could have implications for the country’s future fiscal policies.
As Nigeria navigates its recovery from the pandemic’s economic effects, the continued debt obligations to the IMF serve as a reminder of the long-term financial commitments governments make when taking emergency loans.