CBN: Nigeria’s Balance of Payments Falls 38.1% in 2025

Nigeria’s financial position with the rest of the world weakened in 2025, with new data from the Central Bank of Nigeria (CBN) showing a sharp drop in the country’s Balance of Payments (BOP).

According to provisional figures, the BOP fell by 38.1% to $4.23 billion, down from $6.83 billion in 2024.

The BOP tracks the flow of money into and out of a country, and the latest numbers point to mounting pressure on Nigeria’s external earnings, largely due to weaker crude oil revenues.

Still, there were some offsets. Gas exports rose strongly during the year, while the impact of the Dangote Refinery helped cut Nigeria’s reliance on imported fuel.

What the Data Shows

The CBN said Nigeria recorded a current account surplus of $14.04 billion in 2025. While this is positive, it is lower than the $19.03 billion posted in 2024, though still above the $6.42 billion recorded in 2023.

At the same time, the services account deficit widened. Net outflows rose to $14.58 billion from $13.36 billion the previous year. The increase was driven by higher spending on transport, travel, insurance, and other foreign services.

Oil Declines, Gas and Refining Step Up

Crude oil, long Nigeria’s main export earner, underperformed in 2025.

• Crude oil exports fell 14.4% to $31.54 billion
• Gas exports climbed over 21% to $10.51 billion

A big change came from domestic refining. The Dangote Refinery exported $6.13 billion worth of petroleum products and significantly reduced Nigeria’s fuel import bill.

Fuel imports dropped by nearly 29%, with spending falling to about $10 billion in 2025 from roughly $14 billion in 2024. This is one of the clearest signs yet of Nigeria’s gradual move toward local processing.

Foreign Investment: Mixed Signals

Foreign investment flows told a divided story.

• Foreign Portfolio Investment (FPI): typically short-term funds in stocks and bonds, dropped 48% to $8.04 billion, reflecting investor caution.
• Foreign Direct Investment (FDI): longer-term investments in businesses and infrastructure, surged 149% to $4.01 billion.

The contrast shows that while financial market investors pulled back, long-term investors are still committing capital to Nigeria’s economy.

Why the Surplus is Narrowing

Although Nigeria maintained a current account surplus, it shrank by 26% in 2025. Three main factors drove the decline:

Lower oil exports, reducing foreign exchange earnings

Higher services spending, especially on travel and transport abroad

Increased dividend and interest payments to foreign investors, which rose by 61%

These outflows weigh on the country’s external balance.

Reserves Provide Some Cushion

Despite the weaker BOP, Nigeria’s external reserves improved. Foreign reserves rose by 13.8% to $45.75 billion at the end of 2025.

This buffer gives the CBN some room to support the naira and manage external shocks, even as inflows fluctuate.

The latest data points to an economy in transition. Nigeria is still heavily tied to crude oil, but the rise in gas exports and the growing role of domestic refining are beginning to reshape its external earnings.

The drop in the Balance of Payments highlights ongoing vulnerabilities. However, the surge in FDI suggests that global investors are looking beyond short-term volatility and focusing on Nigeria’s longer-term industrial potential.

With capital shifts from quick trades to physical investments, the country is edging toward a more diversified, production-driven economy, one less dependent on raw crude exports and better positioned as a regional refining and processing hub.

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