Chris Okpoko
As reported in the media recently, Nigeria has completed the payment of a $3.4 billion loan borrowed from the International Monetary Fund (IMF) during the COVID-19 pandemic and has, thus, effectively exited the debtor list of the multilateral bank. The latest IMF report, titled “Total IMF Credit Outstanding – Movement from May 01, 2025 to May 06, 2025,” published on the multilateral lender’s website, revealed that the IMF removed Nigeria from its list of debtor countries following the full settlement of outstanding credit obligations to the Fund. The list of 91 developing and less developed countries had a total of $117.79 billion outstanding as of May 6, 2025.
In 1986, under General Ibrahim Babangida’s administration, Nigeria initiated its first IMF loan request under the conditions of a Structural Adjustment Program (SAP). Since 1987, Nigeria has participated in IMF loan arrangements on February 3, 1989; January 9, 1991; August 4, 2000; and most recently, in 2020 (Wikipedia).
Nigeria’s former President, Muhammadu Buhari, took the $3.4 billion in “emergency financial assistance” from the IMF under the Rapid Financing Instrument (RFI) in 2020. The loan was intended to cushion the dual shocks of the global health crisis and the collapse in oil prices. The facility had a repayment period of five years, with a 1% interest rate and a 3.25-year moratorium.
According to StatiSense, a data company, as of July 28, 2023, Nigeria owed the Fund $1.61 billion. The debt was reduced to $1.37 billion as of January 5, 2024; $933.03 million as of July 10, 2024; and $472.06 million as of January 8, 2025, before it was finally settled this month (May). With the principal fully paid, Nigeria will continue making annual payments of about $30 million in Special Drawing Rights (SDR) charges until 2029. However, with this milestone, Nigeria has joined Switzerland, Singapore, China, and New Zealand on the list of countries not indebted to the IMF.
The International Monetary Fund (IMF) debt list represents a crucial indicator of a country’s financial health and stability, often guiding international perceptions of its economic policies and capabilities. Nigeria’s recent exit from this list heralds a significant shift in its economic outlook, with multifaceted implications for the nation, its citizens, and the broader international community. This article explores the economic, political, and social ramifications of Nigeria’s transition from this globally recognized financial status.
To understand the implications of Nigeria’s exit from the IMF debt list, it is essential to grasp the context surrounding this achievement. Historically burdened by high levels of debt, Nigeria’s previous status on the IMF list carried severe consequences for both domestic policy and international relations. Nigeria’s recognition as a high-risk debtor inhibited foreign direct investment (FDI), diminished investor confidence, and fostered economic instability. By successfully facilitating debt restructuring and nurturing growth, the government’s ability to escape this list marks an important milestone in its quest for economic rejuvenation.
Economically, Nigeria’s exit from the IMF debt list signals a potential resurgence of investor confidence. As international investors analyze Nigeria’s improved financial standing, the perception of risk diminishes, paving the way for increased FDI. Such an influx of capital is crucial for a country like Nigeria, which is grappling with infrastructure deficits and job creation challenges. Projects aimed at boosting manufacturing, technology, and agriculture sectors may find renewed investor interest, leading to job creation, increased productivity, and, ultimately, improved living standards for the populace.
Moreover, Nigeria’s exit may facilitate more favorable borrowing conditions. Without the stigma attached to being listed as a high-risk debtor, Nigeria could negotiate lower interest rates on international loans and bonds. This move could prove advantageous as the government aims to finance key infrastructure projects and enhance economic development. Yet, while the lower cost of borrowing could encourage investment and improve economic growth, it also underscores the need for prudent fiscal management. If mismanaged, the renewed access to credit could lead to a re-accumulation of unsustainable debt.
Politically, Nigeria’s departure from the IMF debt list presents an opportunity for the government to leverage its improved financial status. It could utilize this enhanced standing to foster diplomatic relations and establish new trade partnerships. The significance of such relationships cannot be understated, particularly as Nigeria seeks to diversify its economy beyond its dependence on oil exports. By positioning itself as a more stable economy, Nigeria may negotiate favorable trade agreements to enhance economic growth.
Nonetheless, Nigeria must navigate its exit from the IMF debt list cautiously. While the achievement is commendable, the political landscape remains fraught with challenges. Governance issues, corruption, insecurity, and civil unrest continue to undermine economic progress. Therefore, the government faces the dual challenge of maintaining its newfound fiscal discipline and economic stability while addressing these pervasive socio-political issues. Failure to do so may lead to public disillusionment, exacerbating existing tensions and potentially reversing the progress made.
Additionally, the social implications of Nigeria’s exit are significant. As the government seeks to instigate economic reforms and engender growth, it must recognize the need for inclusive policies that benefit all segments of society. A sudden influx of foreign investment could exacerbate existing inequalities if policies do not prioritize local participation in economic activity. Hence, the government should aim for inclusive development that ensures economic benefits reach marginalized demographics, fostering societal cohesion while avoiding the pitfalls of inequality.
Furthermore, Nigeria’s exit from the IMF debt list can also impact its role within the African continental economic framework. As one of Africa’s largest economies, Nigeria has the potential to influence regional economic policies and cooperation. By establishing stable economic policies and becoming a model for debt management, Nigeria can position itself as a leader in advocating for economic resilience and sustainability across the continent. The potential for collaboration on common economic goals may catalyze broader African economic integration.
In summary, Nigeria’s exit from the IMF debt list encapsulates a pivotal moment in its economic history. The implications of this transition are profound, extending across various dimensions such as investment opportunities, political leverage, and social equity. While the achievements are significant, the government must remain vigilant of the challenges that accompany economic growth, including governance and inclusivity concerns. As Nigeria embarks on this renewed phase of financial ambition, the global community will undoubtedly observe closely, keenly assessing how this transition impacts not only Nigeria but also the broader economic landscape of West Africa and beyond.
