Nigeria has paid off its multi- billion dollar Paris Club debt, becoming the first African nation to settle with its official lenders.
Despite great oil wealth, Nigeria is one of the world's poorest nations
The move may clear the way for greater government spending on infrastructure, healthcare and education, and is hoped will prompt greater foreign investment.
Nigeria has undertaken a programme of economic reforms and the oil exporter has been helped by record crude prices.
The Paris Club is a group of 19 lenders including the UK, Russia, and Germany.
"The central bank has converted the currencies in advance so it's procedural now," Mansur Muhtar, director general of Nigeria's Debt Management Office, told Reuters.
"All the necessary instructions have been sent."
After the $4.6bn payment, Nigeria still will owe about $5bn to other lenders, including the World Bank and the private sector.
Nigeria is one of the world's biggest oil exporters, but it is also one of the world's poorest countries, with the majority of the population living on less than $1 per day.
The government is now benefiting from high oil prices, despite production problems and unrest in the Niger Delta region.
During the years of military dictatorship, little of Nigeria's oil wealth reached the average person. The current government is seeking the recovery of billions of dollars put away in Swiss bank accounts by General Abacha.
The country's debts date back to the early 1980s, and had ballooned to more than $35bn due to penalties and late fees during the 1990s.
GDP per person: $390
Below poverty line: 60%
Life expectancy: 47
Oil revenues: 20% of GDP
Foreign debts: $35bn
Currency reserves: $34bn
Last year the country agreed to a repayment plan that was a mix of cash and debt relief, backed by the country's burgeoning oil revenues.
Nigeria agreed to pay the Paris Club $12.4bn (£8.2bn) in exchange for the remainder of its $30bn official debts being written off.
Nigeria's plan to pay off its debt and restructure its economy was approved by the International Monetary Fund (IMF) earlier this week.
The debt repayment is a key part of the economic reform plan of President Olusegun Obasanjo, who is also planning a string of privatisations, tax reform, and greater transparency in order to boost the economy and attract foreign investors.
Nigeria has already been removed from an international credit blacklist, and now has credit ratings similar to other emerging market countries such as Turkey and Ukraine. That means the government is now able to borrow money on international capital markets on favourable terms.
Different from HIPC
Nigeria has followed a different path from other African countries who have been burdened with debt.
It was not included in the list of highly indebted poor countries (HIPC) that were eligible for 100% debt relief from official lenders, the IMF, and the World Bank, due to its oil wealth.
However, those countries have been subject to stringent conditions and long delays before they qualified for debt relief.
Nigeria has been able to negotiate its own debt deal at its own pace because it has the funds to partially pay off its creditors, who were happy to accept a smaller overall payment in return for cash upfront.
It is good news, Nigeria is now off the hook of the Paris Club. This is a wonderful achievement no doubt by the Obasanjo administration. The fear is that we only hope and pray that subsequent administrations after this do not take this as leeway and open cheque to start borrowing indiscriminately and re-submerge the country into another crippling debt.
Ibedin Aaron, Lagos, Nigeria
For the first time I am proud to be a Nigerian, as the current government has made great strides in the improvement of the Nigerian nation and its people in economical, social and politically. The Obasanjo administration should be applauded for the economic reforms, transparency and anti corruption measures. More needs to be done as we are not there yet.
Jerry Etareri, London England
It is high time the international community recognised what Nigeria has done to re-position its economic status and invest well in the country. Nigeria has a large population and it will be any investor's dream to have the Nigerian market. We sure have come a long way!
Josiah Zubairu, Nigeria/USA