Nigeria’s external financial position weakened in 2025 as its Balance of Payments (BoP) dropped sharply, reflecting declining oil revenues, reduced foreign portfolio inflows, and rising external obligations, according to new data released by the Central Bank of Nigeria.
The report showed that the country’s BoP fell by 38 per cent to $4.23 billion, highlighting mounting pressure on the economy despite gains in other sectors. Although Nigeria maintained a current account surplus, the figure declined significantly by 26.2 per cent to $14.04 billion in 2025, down from $19.03 billion recorded in 2024.
A key factor behind the contraction was a drop in crude oil export earnings. Revenue from oil exports fell by 14.4 per cent to $31.54 billion, compared to $36.85 billion the previous year. This decline came even as gas exports surged by 21.4 per cent to $10.51 billion, partially cushioning the impact of weaker crude sales.
Further analysis of the current account revealed that the goods account posted a stronger surplus of $14.51 billion. This improvement was largely driven by increased refined petroleum exports from the Dangote Refinery, which contributed $6.13 billion. The refinery’s operations also helped reduce Nigeria’s reliance on imported fuel, with fuel import costs dropping by 28.9 per cent from $14.06 billion to $10.00 billion.
However, Nigeria’s financial account recorded a notable reversal, shifting from a net lending position of $9.65 billion in 2024 to a net borrowing position of $1.69 billion in 2025. This change was primarily attributed to a sharp 48.3 per cent decline in Foreign Portfolio Investment (FPI), which fell to $8.04 billion from $15.55 billion in the previous year.
In contrast, Foreign Direct Investment (FDI) inflows showed strong growth, rising by 149.1 per cent to $4.01 billion from $1.61 billion in 2024. The increase suggests renewed confidence among long-term investors, particularly in equity participation and reinvested earnings within the Nigerian economy.
The BoP was further strained by higher outflows in services and primary income accounts. The services account deficit widened to $14.58 billion, driven by increased spending on transportation, travel, and insurance. Meanwhile, net outflows in the primary income account surged by 60.9 per cent to $9.09 billion, largely due to higher dividend and interest payments to foreign investors.
Despite these pressures, Nigeria’s external reserves recorded a positive performance, growing by 13.8 per cent to close the year at $45.75 billion. Analysts say the rise in reserves provides a buffer against external shocks as the country navigates ongoing structural adjustments in trade and investment flows.
The apex bank noted that the decline in the current account surplus was influenced by multiple factors, including reduced crude oil exports, increased non-oil imports, crude purchases by the Dangote Refinery, and higher service-related outflows.
Overall, the data underscores the continued vulnerability of Nigeria’s external sector to fluctuations in oil revenues, even as efforts to diversify the economy and attract long-term investment begin to show gradual progress.
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