IMF: FGN to pay $3.51bn in five years as debt service

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The Federal Government of Nigeria is expected to pay the International Monetary Fund (IMF) a total amount of $3.51bn between 2022 and 2026 to offset a $3.4bn loan.

This is according to a report on IMF’s website, titled ‘Nigeria: Financial Position in the Fund as of January 31, 2022.’

It should be recalled that in April 2020, the IMF disbursed a $3.4bn emergency financial assistance to Nigeria

The loan was approved under the Rapid Financing Instrument by the Executive Board of the IMF on April 28, to address challenges arising from the economic impact of the COVID -19 in the country.

A statement by the IMF on the loan read, “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.”

It was also disclosed that out of four agreed loans, disbursement was made on only one loan.

Under a section titled ‘Overdue Obligations and Projected Payments to Fund’, a breakdown of how much Nigeria is expected to pay each year is provided.

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

SDR1 is currently $1.39 based on the exchange rate provided by the IMF on its website.

As a result, in 2022, Nigeria is expected to pay SDR26.91m ($37.40m), which includes only the interest fee on the loan.

Nigeria is expected to pay a total of SDR639.81m ($889.34m) in 2023. This comprises a principal fee of SDR613.63m ($852.95m) and an interest fee of SDR26.18m ($36.39m).

In 2024, Nigeria is expected to pay a total of SDR1.24bn ($1.72bn). This comprises a principal fee of SDR1.23bn ($1.72bn) and an interest fee of SDR15.29m ($21.25m).

The country is expected to pay a total of SDR616.38m ($856.77m) by 2025. This comprises a principal fee of SDR613.63m ($852.95m) and an interest fee of SDR2.75m ($3.82m).

The least amount is expected by 2026, which is only an interest fee of SDR0.28m ($389,200).