Nigeria pays off $3.4 billion IMF Covid-19 loan, bolsters financial position

The Federal Government of Nigeria has successfully repaid its $3.4 billion loan borrowed from the International Monetary Fund (IMF) during the Covid-19 pandemic.

Finance Minister Wale Edun confirmed on Thursday that the loan has been cleared off.

This significant milestone marks Nigeria’s exit from the list of countries indebted to the Washington-based lender.

The loan, granted in April 2020, was part of the IMF’s emergency assistance program to help countries cope with the economic impact of the pandemic. Nigeria’s repayment, made on the agreed terms, demonstrates the country’s improved financial position and commitment to fiscal responsibility.

According to the IMF, Nigeria will still incur annual charges of approximately $30 million in Special Drawing Rights. However, the repayment is a testament to the country’s progress in stabilizing its economy.

The central bank’s net foreign exchange reserves have reached a three-year high, thanks to President Bola Tinubu’s economic reforms, including the free-floating of the naira. Although the naira has lost over 70% of its value against the dollar since the reform, the IMF has commended Nigeria’s efforts, noting that they have put the country in a better position to navigate external challenges.

The repayment is expected to boost investor confidence and further solidify Nigeria’s financial stability. As the country continues to implement its economic reforms, the IMF’s recognition of its progress is a positive indicator of its growth trajectory.

With this development, Nigeria has demonstrated its ability to manage its finances effectively and navigate complex economic challenges. The country’s improved financial position is expected to have a positive impact on its economic growth and development.