Nigeria’s external sector came under notable pressure in 2025, as fresh data from the Central Bank of Nigeria (CBN) showed a sharp contraction in the country’s Balance of Payments (BOP) surplus, reflecting mounting vulnerabilities in trade and capital flows.
According to provisional figures, the BOP surplus declined by 38.1 per cent to $4.23 billion in 2025, down from $6.83 billion recorded in 2024. The downturn highlights a year marked by weaker crude oil earnings and a significant pullback in foreign portfolio investment, which overshadowed improvements in gas exports and refined petroleum output.
The current account, a key measure of trade and income flows, remained in surplus but narrowed considerably. It fell by 26.2 per cent year-on-year to $14.04 billion, compared with $19.03 billion in 2024. This contraction was largely driven by a drop in crude oil exports, which declined by 14.4 per cent to $31.54 billion.
In contrast, gas exports provided some relief, rising sharply by 21.4 per cent to $10.51 billion. Additionally, refined petroleum exports emerged as a bright spot, supported by the operational scale-up of the Dangote Refinery. The facility contributed $6.13 billion in exports and significantly reduced Nigeria’s reliance on imported fuel, with fuel imports falling by 28.9 per cent to $10.00 billion.
Overall, the goods account posted a stronger surplus of $14.51 billion, underscoring the growing importance of domestic refining capacity in reshaping the country’s trade structure.
On the financial side, Nigeria recorded a major reversal. The financial account shifted from a net lending position of $9.65 billion in 2024 to a net borrowing position of $1.69 billion in 2025. This was primarily due to a steep 48.3 per cent decline in foreign portfolio investment inflows, which dropped to $8.04 billion.
However, foreign direct investment (FDI) offered a counterbalance, rising significantly by 149.1 per cent to $4.01 billion. The increase suggests renewed confidence among long-term investors, particularly through equity participation and reinvested earnings.
Further pressure on the external balance came from rising service-related payments and income outflows. The services account deficit widened to $14.58 billion, driven by higher spending on travel, transportation, and insurance.
Even more pronounced was the increase in primary income outflows, which surged by 60.9 per cent to $9.09 billion. The CBN attributed this to higher dividend and interest payments to foreign investors holding both portfolio and direct investments in Nigeria.
Despite these challenges, Nigeria’s external reserves recorded a notable improvement, rising by 13.8 per cent to $45.75 billion by year-end. The increase in reserves provides a critical buffer as the economy adjusts to ongoing structural shifts in trade composition and investment flows.
The CBN noted that the decline in the current account surplus was influenced not only by weaker oil exports but also by increased non-oil imports, which rose by 13.6 per cent to $29.24 billion, as well as new crude oil imports linked to refining activities.
Overall, the 2025 BOP data reflects a mixed economic picture: while diversification efforts in gas and refining are beginning to yield results, persistent dependence on oil revenues and volatile capital flows continue to pose risks to Nigeria’s external stability.