Nigeria ordered a final debt repayment to rich lending nations on Friday, completing Africa's biggest debt relief deal that will free up billions of dollars in coming years to fight poverty.
Under an agreement reached last June, nations belonging to the Paris Club of creditors wrote off $18 billion they were owed by Nigeria, which is using windfall earnings from high oil prices to pay off $12.4 billion in arrears and debts.
On Friday, Nigeria's central bank arranged for a final instalment of $4.5 billion to be transferred to creditors' accounts, the head of the Debt Management Office (DMO) said.
"The central bank has converted the currencies in advance so it's procedural now. All the necessary instructions have been sent," Mansur Muhtar told Reuters.
Nigeria is the world's eighth biggest exporter of crude oil and its earnings have soared thanks to high prices on world markets, allowing it to build up $36 billion of foreign reserves.
But it is also one of the world's poorest countries, with the majority of its 140 million inhabitants getting by on less than $1 a day.
Nigeria was passed over for debt relief in the 1980s and 1990s because it was ruled by corrupt military dictators and it did not have an agreement with the International Monetary Fund.
President Olusegun Obasanjo, who came to power in a 1999 transition to democracy, launched a programme of free-market reforms that drew praise from the IMF and helped persuade Paris Club members that Nigeria had changed its ways.
Obasanjo has pledged that funds that would have gone towards repaying Paris Club debts would now be used for education, health, infrastructure and other poverty-alleviating measures.
Analysts said the successful completion of the deal and its endorsement by the IMF through a new kind of agreement called a Policy Support Instrument would help redeem Nigeria's reputation in international financial circles.
It has already helped Nigeria achieve an unexpectedly favourable BB- rating, on a par with Turkey and Ukraine, from two leading international credit rating agencies.
This means Nigerian banks will be able to get loans from abroad and it will be easier and safer for foreign investors to put money into Nigerian equities.
Combined with a reform of the banking and insurance sectors, the improved rating has already attracted new portfolio investors and credit lines to the Nigerian economy.
However, analysts said problems such as corruption, militant attacks in the oil-producing south, ethnic and religious violence across the country and poor infrastructure would still weigh heavily on the minds of some investors.
"The debt relief deal is certainly useful as part of a wider package, but I don't think it will persuade investors to rush in," said Alex Vines, head of the African department at Britain's Royal Institute for International Affairs.
"Abductions of foreign nationals, violence, riots, issues of corruption, all of this makes business timid," he added.
A four-month campaign of attacks on the oil industry and kidnappings of foreign oil workers by militants demanding more rights for the Niger Delta has cut Nigeria's exports of crude by a quarter and forced foreign firms to abandon several oilfields.
Political tensions are also on the rise across the country because of a campaign by the ruling party to change the constitution so Obasanjo can stand for a third term in elections next year.
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