The Nigerian government under President Bola Tinubu will liquidate a loan $3.4bn owed to the International Monetary Fund (IMF) during his tenure, according to reports gathered by VERY SERIAL. The Punch Newspaper had earlier reported that the Federal Government is planning to pay the IMF a total of $3.51bn between 2022 and 2026 to offset the $3.4bn loan.
During Bola Tinubu’s current administration, a $3.4 billion debt owed to the International Monetary Fund (IMF) is expected to be settled. The Nigerian Federal Government is set to pay the IMF a total of $3.51 billion between 2022 and 2026 in order to clear the $3.4 billion loan.
IMF webpage reveals $3.19 billion outstanding repayment in Nigeria’s current administration
However, details from an IMF webpage titled ‘Nigeria: Financial Position in the Fund as of July 31, 2023’ reveal that there’s still an outstanding amount of $3.19 billion to be repaid within the current administration’s tenure.
The IMF provided emergency financial assistance of $3.4 billion to Nigeria in April 2020 under the Rapid Financing Instrument.
This loan was aimed at addressing the economic challenges posed by the COVID-19 pandemic and the sharp decline in oil prices.
According to the breakdown of payments outlined in the ‘Overdue Obligations and Projected Payments to Fund’ section, Nigeria’s payment schedule is detailed.
In 2023, Nigeria is expected to pay SDR 373.81 million ($497.17 million), which includes both the principal (SDR 306.81 million/$408.06 million) and the interest fee (SDR 67 million/$89.11 million).
The repayment is structured in Special Drawing Rights (SDR), an international reserve asset. Subsequent years will see Nigeria paying a total of SDR 1.32 billion ($1.76 billion) in 2024, SDR 650.58 million ($865.27 million) in 2025, and SDR 25.56 million ($33.99 million) each in 2026 and 2027 as interest fees.
The repayment period was observed to have been extended to 2027 from the initially reported 2026.
In total, the current administration is expected to repay $3.19 billion to the IMF, suggesting that the previous administration likely paid $320 million towards the loan.
The Central Bank of Nigeria’s 2022 financial statements acknowledged the loan’s existence, stating that it was a 5-year facility with a 2-year moratorium period and a 1% per annum interest rate.