Nigeria has cleared its entire $1.61 billion debt to the International Monetary Fund (IMF), worth N2.59 trillion. The Ministry of Finance confirmed the full repayment in a statement released late on May 6, 2025. This move marks the end of Nigeria’s reliance on IMF emergency borrowing since the global economic downturn. The loans came through IMF’s Rapid Financing Instrument and Extended Credit Facility from 2020 to 2023. The funds helped Nigeria manage inflation, pandemic-related shocks, and declining oil revenues.
Nigeria repaid the debt earlier than scheduled, with payments originally planned through 2026. This early repayment reflects stronger fiscal conditions and key reforms by President Tinubu’s administration. Major reforms included removing fuel subsidies, boosting tax collection, and growing non-oil revenue streams.
Finance Minister Wale Edun called the repayment a testament to Nigeria’s resilience and economic discipline. He said clearing the debt frees resources for critical sectors like education, healthcare, and infrastructure.
In a press briefing, he stated, “This milestone reflects the hard work of our administration in stabilizing the economy and reducing our external vulnerabilities. By clearing this debt, we are freeing up resources for critical investments in infrastructure, education, and healthcare, which will drive sustainable growth.”
Paying off the IMF loan also cancels millions in annual interest payments for Nigeria. Analysts believe this could lead to better credit ratings from agencies like Moody’s and Fitch.
Former Finance Minister Ngozi Okonjo-Iweala said it shows Nigeria is serious about debt sustainability. She noted that investor confidence could rise, improving Nigeria’s access to future credit if needed.
“This is a positive signal to international investors that Nigeria is serious about debt sustainability,” said Dr. Ngozi Okonjo-Iweala, former Nigerian Finance Minister and current Director-General of the World Trade Organization, in a statement. “It opens doors for more favorable borrowing terms in the future, should they be needed.”
The IMF welcomed the move, praising Nigeria’s commitment to responsible financial management.
However, economists say challenges remain, including inflation at 28% and a volatile currency market. Experts urge continued reforms in agriculture, manufacturing, and attracting foreign direct investment. The government targets 5% GDP growth by 2026, with a focus on technology and renewables. Nigeria also hopes to secure better funding deals with institutions like the African Development Bank.
Central Bank Governor Olayemi Cardoso said the debt repayment restores Nigeria’s economic sovereignty.
“This is not just about paying off a loan; it’s about reclaiming our economic sovereignty and building a future where Nigeria thrives independently”
He added it lays a foundation for growth driven by national priorities, not external debt.
Debt Clearance Sparks Optimism for Nigeria, but Caution Remains
The repayment marks a turning point in Nigeria’s economic story, offering hope for a more stable future. Still, economists stress that real success depends on consistency in policy and deeper structural reform. With this milestone achieved, Nigeria may enter a new era of opportunity, but the work continues.