FG sets date for repayment of $3.4 billion IMF loan as oil marketers demand petrol subsidy

During his administration, Bola Tinubu's government is expected to pay to settle a $3.4 billion debt owed to the International Monetary Fund.

Earlier reports said the Nigerian government is expected to pay $3.51 billion between 2022 and 2026 to offset the $3.4 billion loan.

IMF gave the loan to fight impact of COVID-19

Information on the IMF's website about Nigeria's financial position in the fund as of July 31, 2023, says there is an outstanding $3.19 billion, which the Tinubu government would pay off.

Punch reports that in April 2020, the IMF disbursed Nigeria a $3.4 billion loan in emergency financial aid.

The Rapid Financing Instrument of the Executive Board of the IMF approved the loan on April 28 to address the issues caused by the economic effect of the COVID-19 pandemic on Nigeria.

Precisely, the loan was disbursed on April 30, 2020.

The IMF statement: "The IMF approved $3.4bn 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."

The IMF said that disbursement was made on only one loan out of the four agreed loans.

IMF provides breakdown of Nigeria's loan history

A breakdown of how Nigeria is expected to pay each loan is provided under the 'Overdue Obligations and Projected Payments to the Fund.'

The amount to be paid was provided in the Special Drawing Rights (SDR), an international reserve asset designed by the IMF in 1969 to supplement its member countries' official reserves.

In 2023, Nigeria is expected to pay $497.17 million, which includes a principal of $408.04 and an interest fee of $89.11 million on the loan.

The West African country is expected to pay $1.76 billion in 2024, comprising a principal fee of $1.64 billion and an interest fee of $126.03 million.

In 2025, Nigeria is expected to pay $865.27 million comprising a principal fee of $816.13 million and an interest fee of $49.14 million.

Tinubu's government to repay $3.19 billion before 2027

Africa's biggest economy is expected to pay $33.99 million each in 2026 and 2027, which is just the interest fee.

The amount is the last during the repayment period. According to reports, the repayment has been extended to 2027.

In all, Tinubu's government is expected to pay $3.19 billion to the IMF, suggesting that the previous government may have paid $320 million on the loan.

The Central Bank of Nigeria (CBN) made reference to the loan in its 2022 financial statements.

CBN said: "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 years tenor facility, repayable after a moratorium of 2 years and the interest rate is 1% per annum."

"Repayment of the IMF loans, as well as charges, is the responsibility of the bank."