How Nigeria’s balance of payments surplus hit $4.60bn in Q3 2025

Nigeria recorded a significant turnaround in its external sector position in the third quarter of 2025, posting a Balance of Payments (BOP) surplus of $4.60 billion, as sweeping reforms by the Central Bank of Nigeria (CBN) and fiscal authorities continue to strengthen macroeconomic stability, boost investor confidence and attract foreign capital inflows. The latest data […]

Nigeria recorded a significant turnaround in its external sector position in the third quarter of 2025, posting a Balance of Payments (BOP) surplus of $4.60 billion, as sweeping reforms by the Central Bank of Nigeria (CBN) and fiscal authorities continue to strengthen macroeconomic stability, boost investor confidence and attract foreign capital inflows.

The latest data released by the apex bank show that the Q3 2025 performance marks a sharp reversal from the deficit position recorded in the preceding quarter, underscoring the growing impact of reforms in the foreign exchange market, monetary policy implementation and the domestic energy sector.

The improvement was driven by a sustained current account surplus, stronger export performance, resilient diaspora remittances, rising foreign investment inflows and continued accretion to external reserves. Analysts say the development reflects Nigeria’s gradual transition from crisis management to a more stable and sustainable economic recovery path.

Daily Trust reports that BOP of a country is the record of all economic transactions between the residents of the country and the rest of the world in a particular period of time.

According to the CBN, the overall BOP surplus was supported by a current account surplus of $3.42 billion in Q3 2025, buoyed by improved trade balance, steady remittance inflows and increased financial flows.

The goods account remained firmly in surplus at $4.94 billion, reflecting higher export earnings and a decline in imports of refined petroleum products. Total exports rose to $15.24 billion in Q3 2025 from $14.90 billion in Q2, driven largely by increases in crude oil and refined petroleum products exports.

Crude oil exports climbed to $8.45 billion, while exports of refined petroleum products surged by 44 per cent to $2.29 billion, indicating further progress in domestic refining capacity and Nigeria’s gradual transition from a net importer to a net exporter of refined petroleum products.

Import of petroleum products declined by 12.7 per cent to $1.65 billion, strengthening the trade balance and easing pressure on foreign exchange demand. The development aligns with the government’s deregulation of the downstream sector and the emergence of new private refineries, which are positioning Nigeria higher up the energy value chain.

The CBN noted that the country is “gradually switching from a net importer of refined petroleum products to a net exporter,” a development that could significantly improve external balances over the medium term.

 

Services, income accounts post higher outflows

While the goods account recorded strong performance, the services account saw an increase in net outflows. Net payments in the services account rose to $4.07 billion in Q3 2025 from $3.74 billion in Q2, reflecting higher imports of transport, travel, insurance, computer and information services, other business services and government services not included elsewhere.

Similarly, the debit balance in the primary income account widened significantly to $2.95 billion in Q3 2025 from $1.25 billion in Q2, largely due to the repatriation of reinvested earnings by domestic banks on their foreign investments abroad, particularly on direct investments.

However, the secondary income account remained in strong surplus at $5.50 billion, only slightly lower than $5.51 billion recorded in the preceding quarter.

Workers’ remittances from Nigerians in the diaspora stood at $5.24 billion in Q3 2025, marginally lower than $5.30 billion in Q2, but still reflecting strong and resilient inflows.

Diaspora remittances, estimated at about $23 billion annually, remain one of Nigeria’s most reliable sources of foreign exchange and continue to play a stabilising role in the external sector.

Developments in the financial account further supported the overall BOP outcome, with Nigeria recording a net lending position of $0.32 billion in Q3 2025. Foreign direct investment (FDI) inflows rose to $0.72 billion, while portfolio investment inflows remained robust at $2.51 billion, reflecting improved investor sentiment and sustained non-resident participation in domestic financial instruments.

Stakeholders attribute the renewed interest in Nigerian assets to the liberalisation of the foreign exchange market, improved dollar liquidity, exchange rate unification and the clearing of the over $7 billion FX backlog, which had previously constrained investor confidence.

Nigeria also successfully returned to the international capital markets in December 2024 and has since been upgraded by rating agencies, further strengthening its investment outlook.

The apex bank noted that the reforms have helped in organically rebuilding FX reserves through stronger non-oil exports, improved market functioning and reduced reliance on intervention.

The CBN said the Q3 2025 BOP outcome underscores strengthening external sector fundamentals, firmer investor confidence and the continued impact of reforms in the foreign exchange market, monetary policy implementation and the domestic energy sector.

Since 2023, the CBN under Governor Olayemi Cardoso, in collaboration with the fiscal authorities, has embarked on reforms aimed at restoring macroeconomic stability, attracting foreign capital and achieving price and exchange rate stability.

Key measures include the liberalisation of the foreign exchange market, unification of exchange rates, discontinuation of central bank financing of fiscal deficits, fuel subsidy reforms, improved revenue mobilisation and strategic steps to tame inflation.

The clearing of FX backlogs, adoption of a willing buyer–willing seller FX model, licensing of new International Money Transfer Operators (IMTOs) and improved access to naira liquidity for IMTOs have also simplified dollar inflow channels and boosted confidence in the FX market.

According to market participants, these measures have led to a more balanced dollar liquidity dynamic, with foreign investors and airlines now able to repatriate funds more easily.

Director of Trading at Verto, Charlie Bird, recently said Nigeria is becoming a darling of foreign investors again due to improved dollar liquidity and positive CBN reforms.

Speaking during Cordros Asset Management seminar titled: “The Naira Playbook”, he said Nigeria is now darling of foreign investors because of improved dollar liquidity in the economy due to positive CBN’s reforms.

The CBN has intensified efforts to cultivate multiple FX sources to increase dollar inflows, boost access for manufacturers and retail end users, and reduce pressure on the naira.

From enhancing diaspora remittance products, granting licences to new IMTOs, improving agent-banking controls and deepening financial inclusion, to promoting non-oil exports, the apex bank is strengthening the entire FX value chain.

The initiatives have supported substantial accretion to gross FX reserves and improved market stability. The CBN has also reiterated its objective of doubling formal remittance receipts within a year through improved product offerings and stronger market confidence.

Beyond the external sector, macroeconomic indicators are also showing signs of improvement. Nigeria’s economy grew by 4.23 per cent in Q2 2025, the strongest pace in four years, driven by gains in telecommunications, financial services and oil production.

Inflation, though still elevated, has moderated consistently. From a peak of 34.6 per cent in November 2024, headline inflation fell to 16.05 per cent in October 2025, marking seven consecutive months of disinflation. Food inflation declined to 13.12 per cent in October, down from 21.87 per cent in August.

According to Cardoso, over the past 12 months, Nigeria’s economy has transitioned from crisis management to laying the groundwork for sustainable recovery.

“After nearly a decade in which real GDP growth averaged about 2 per cent, reforms have restored momentum and confidence in our broad macroeconomic environment,” he said.

He emphasised that achieving macroeconomic stability requires sustained vigilance, coordination between fiscal and monetary authorities and a disciplined policy stance.

“Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence,” Cardoso stated.