Nigeria’s balance of payments falls 38% to $4.23bn

Data from the Central Bank of Nigeria shows that Nigeria’s balance of payments (BoP) declined by 38 per cent to $4.23 billion in 2025, reflecting mounting pressures on the country’s external position.

The current account remained in surplus but contracted significantly, dropping by 26.2 per cent to $14.04 billion from $19.03 billion in the previous year. The account captures the net value of trade in goods and services.

A key factor behind the decline was the drop in crude oil export earnings, which fell by 14.4 per cent to $31.54 billion from $36.85 billion. This occurred despite a 21.4 per cent rise in gas exports, which increased to $10.51 billion.

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The goods account recorded a stronger surplus of $14.51 billion, supported by improved trade performance and contributions from the Dangote Refinery. The refinery boosted refined petroleum exports and helped reduce fuel imports by 28.9 per cent, from $14.06 billion to $10.00 billion.

The financial account shifted sharply from a net lending position of $9.65 billion in 2024 to a net borrowing position of $1.69 billion in 2025. This reversal was driven largely by a 48.3 per cent decline in foreign portfolio investment inflows, which fell to $8.04 billion from $15.55 billion.

In contrast, foreign direct investment inflows rose significantly by 149.1 per cent to $4.01 billion, up from $1.61 billion, signalling increased confidence among long-term investors.

External pressures intensified as the services account deficit widened to $14.58 billion, driven by higher spending on transport, travel, and insurance. Net outflows in the primary income account also surged by 60.9 per cent to $9.09 billion, reflecting increased dividend and interest payments to foreign investors.

The apex bank stated: “Provisional balance of payments statistics for 2025 show a current account surplus of $14.04 billion, lower than the $19.03 billion recorded in the previous year but significantly higher than the $6.42 billion in 2023.

“Major contributors to the decline in the current account include the decrease in crude oil exports from $36.85 billion to $31.54 billion, crude oil imports of $3.74 billion by Dangote Refinery, an increase in non-oil imports from $25.74 billion to $29.24 billion, and a rise in net out-payments for services from $13.36 billion to $14.58 billion.”

Despite the pressures, Nigeria’s external reserves rose by 13.8 per cent to $45.75 billion, providing a buffer against ongoing structural adjustments in trade and investment flows.