### Summary
Nigeria is expected to repay a $3.5 billion loan from the International Monetary Fund (IMF) in 2025. The loan was approved in 2020 to address the economic impact of the COVID-19 pandemic. Nigeria has made only one payment out of the four loan disbursements.
### Facts
- Nigeria is expected to repay a $3.5 billion IMF loan in 2025.
- The loan was approved in 2020 to address the economic impact of the COVID-19 pandemic.
- Nigeria has made only one payment out of the four loan disbursements.
- The breakdown of the loan shows that Nigeria is expected to pay $497.17 million in 2023, $1.76 billion in 2024, $865.27 million in 2025, and $33.99 million each in 2026 and 2027.
- Nigeria's repayment has been extended to 2027.
- The previous government may have paid $320 million on the loan.
- Petrol marketers in Nigeria are demanding petrol subsidies amid rising depot prices.
- The Nigerian government has successfully repaid a $500 million Eurobond borrowed under former President Goodluck Jonathan.
### Credit
Source: KOLA SULEIMON (Getty Images)
Malawi's central bank has stated that the country is making progress in restructuring its $1.2 billion external debt, with negotiations with creditors showing positive results and the government remaining optimistic about reaching acceptable terms. The lack of foreign currency has constrained debt servicing and affected the government's operations, leading to severe shortages of vital imports and long queues at fuel stations.
Ghana, facing bankruptcy, has sought its 17th bailout from the IMF since 1957, highlighting the persistent cycle of crisis and bailout faced by many poor and middle-income countries, with the debt burden threatening economies and social progress.
The Bank of Ghana is expected to hold its interest rate at 30% due to pressures from the strong US dollar, as central banks across Africa grapple with balancing inflation control and economic growth.
Ghana is facing an unprecedented financial crisis as protestors demand the resignation of the governor of the Bank of Ghana over the loss of $5.2 billion, causing depreciation of the currency and crippling inflation. The government's mismanagement and failure to repay loans have led to a surge in debt, forcing them to approach the IMF for assistance. The crisis undermines confidence in the financial system and the central bank's authority.
Many developing countries, particularly in Africa, are facing a severe debt crisis due to multiple crises and rising borrowing costs, with over 3.3 billion people living in countries that spend more on interest payments than on education or health, posing significant challenges for debt relief efforts led by traditional creditors and complicated by China's role as a major lender and the rise of private bondholders.
Developing countries, particularly in Africa, are facing a crippling debt crisis due to multiple crises, such as the COVID-19 pandemic, the war in Ukraine, and climate change, with billions of people living in countries that spend more on interest payments than on education or health, posing significant challenges for debt relief efforts.
The IMF expects Ghana to reach a debt restructuring agreement with bilateral creditors in the next six to eight weeks, which would enable the country to receive a second disbursement from the $3 billion IMF loan and support its economic recovery efforts.
The Nigerian government has secured a $1.5 billion loan from the World Bank and an $80 million loan from the African Development Bank to fund various projects in critical sectors of the economy. The loans are being received due to Nigeria's recent macroeconomic moves and tough decisions made by President Bola Tinubu.
Ghana's sovereign dollar bonds experienced a sharp decline after the government proposed debt rework scenarios that would involve a 30% to 40% haircut on the principal, disappointing investors. However, the bonds later recovered slightly, though they remained down on the dollar; Ghana is in talks with creditors to restructure its debts during its severe economic crisis, aiming for a coupon of no more than 5% and a final maturity of not more than 20 years on new bonds.
African countries face debt distress because of insufficient action taken to manage their debt and reluctance to cut social spending, according to former Nigerian Minister of Finance, Kemi Adeosun, who emphasized the need for international mechanisms for debt restructuring.