The present administration led by Bola Tinubu is poised to fulfill a significant financial obligation of settling a $3.4 billion debt to the International Monetary Fund (IMF) during its tenure.According to recent coverage by Saturday PUNCH, Nigeria’s Federal Government is expected to disburse a total of $3.51 billion between 2022 and 2026, effectively offsetting the $3.4 billion loan.Citing data retrieved from an IMF webpage titled ‘Nigeria: Financial Position in the Fund as of July 31, 2023,’ it becomes evident that an outstanding amount of $3.19 billion remains. This balance is slated to be cleared during the current administration.In April 2020, the IMF took steps to alleviate the economic strain brought on by the COVID-19 pandemic by providing emergency financial assistance amounting to $3.4 billion to Nigeria.This financial support was granted under the Rapid Financing Instrument, authorized by the IMF’s Executive Board on April 28, 2020, as a measure to mitigate the adverse effects of the pandemic and the drastic decline in oil prices.The disbursal of the loan, which was approved on April 30, 2020, prompted a statement from the IMF affirming its purpose: “The IMF approved $3.4 billion 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.”Significantly, it was revealed that out of four agreed loans, disbursement was effectuated only for one.Documenting the financial obligations and anticipated payments, a breakdown of annual dues is outlined under the ‘Overdue Obligations and Projected Payments to Fund’ section.The payments are denominated in Special Drawing Rights (SDR), an international reserve asset established by the IMF in 1969 to supplement official reserves held by member nations. The exchange rate provided by the IMF’s website values SDR1 at $1.33.Thus, the projection for 2023 anticipates Nigeria to pay SDR373.81 million ($497.17 million), encompassing both principal (SDR306.81 million/$408.06 million) and interest (SDR67 million/$89.11 million).Further calculations reveal Nigeria’s expected payment of SDR1.32 billion ($1.76 billion) in 2024, with the principal sum amounting to SDR1.23 billion ($1.64 billion) and an interest charge of SDR94.76 million ($126.03 million).Subsequently, the year 2025 expects a total payment of SDR650.58 million ($865.27 million), including a principal obligation of SDR613.63 million ($816.13 million) and an interest cost of SDR36.95 million ($49.14 million).During both 2026 and 2027, Nigeria is anticipated to make interest-only payments of SDR25.56 million ($33.99 million) each year. This marks the least financial commitment during the repayment period.An astute observation by The PUNCH highlighted that the repayment period has been extended to 2027 from the initially reported 2026.In summation, the new administration’s responsibility encompasses a $3.19 billion settlement with the IMF, hinting at the likelihood that the preceding administration had repaid around $320 million of the loan.Reiterating these financial transactions, the Central Bank of Nigeria (CBN) referred to the IMF loan in its 2022 financial statements, indicating, “In 2020, the Bank entered into rapid financing instrument’s arrangement with International Monetary Fund on behalf of Federal Government of Nigeria. The loan is a 5-year tenor facility, repayable after a moratorium of 2 years and the interest rate is 1% per annum.”The CBN further clarified, “Repayment of the IMF loans as well as charges is the responsibility of the bank.”