CBN Says Improved Financial Account and Rising Reserves Offset Weaker Trade and Income Earnings
Nigeria’s financial transactions with the rest of the world recorded a strong turnaround in the third quarter of 2025, as the country posted a Balance of Payments (BOP) surplus of $4.60 billion, reversing the $0.27 billion deficit recorded in the preceding quarter.
The improvement indicates that Nigeria received more foreign inflows than it spent during the period.
The Central Bank of Nigeria (CBN) disclosed this in its Balance of Payments Highlights for Q3 2025, released on Tuesday. According to the apex bank, the stronger position was driven largely by improved financial flows and a significant increase in external reserves, even as earnings from trade and income moderated.
Financial account drives recovery
The biggest boost to the BOP position came from the financial account, which tracks cross-border investments, loans and savings.
In the second quarter of 2025, Nigeria was a net borrower, recording net inflows of about $6.9 billion. By the third quarter, this position reversed, with the country recording net lending of $0.32 billion, meaning it accumulated more foreign assets than it borrowed.
A major contributor was the rise in external reserves, which climbed from $37.81 billion at the end of June to $42.77 billion by the end of September, strengthening Nigeria’s foreign exchange buffer.
Foreign investment flows showed mixed trends during the quarter. Foreign portfolio investment, which represents short-term capital, declined sharply to $2.51 billion from $5.28 billion in Q2, pointing to reduced risk appetite among short-term investors.
In contrast, foreign direct investment (FDI), a measure of long-term investor confidence, rose significantly to $0.72 billion, up from $0.09 billion in the previous quarter.
Goods trade remains supportive
Nigeria’s trade in goods continued to provide support to the external position. The goods account recorded a surplus of $4.94 billion in Q3 2025, slightly lower than the $5.28 billion posted in Q2 but stronger than levels recorded in the same period last year.
Total exports increased to $15.24 billion, driven mainly by crude oil and refined petroleum products. Crude oil export earnings rose to $8.45 billion, while exports of refined fuel climbed sharply to $2.29 billion.
At the same time, imports of refined petroleum products fell by 12.7 per cent to $1.65 billion, reflecting improved local refining capacity.
However, higher imports of machinery, raw materials and consumer goods limited the expansion of the trade surplus.
Current account surplus narrows
Despite the strong overall BOP performance, Nigeria’s current account position weakened, with the surplus falling by 41.14 per cent to $3.42 billion from $5.81 billion in the previous quarter.
The decline was attributed to higher income payments to foreign investors and increased spending on services such as transport, travel and insurance.
Diaspora remittances remained resilient at $5.24 billion, helping to cushion the impact of higher outflows and support the economy during the quarter.
Overall, the CBN said the Q3 2025 results reflect improving financial management and stronger external buffers, even as structural pressures continue to weigh on trade and income balances.
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