Nigeria Sees 38% Slump in Balance of Payments, Dropping to $4.23 Billion in 2025

Nigeria's external sector faced significant challenges in 2025, with the country's overall Balance of Payments surplus plummeting by 38.1 percent to $4.23 billion, down from $6.83 billion in 2024, according to provisional data from the Central Bank of Nigeria.

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This decline was largely driven by a sharp drop in crude oil earnings and a massive decline in foreign portfolio investments, which outweighed gains in gas exports and the emergence of the Dangote Refinery as a major exporter of refined petroleum products.

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The Current Account, which represents the net of the country's trade in goods and services, remained in surplus but saw a significant contraction of 26.2 percent to $14.04 billion in 2025, compared to $19.03 billion in the previous year.

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A major driver of this decline was the 14.4 percent drop in crude oil exports, which fell to $31.54 billion from $36.85 billion in 2024, despite a 21.4 percent surge in gas exports to $10.51 billion.

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The Goods Account, a subset of the current account, recorded a higher surplus of $14.51 billion, bolstered by the Dangote Refinery's contribution of $6.13 billion in refined petroleum exports, which helped slash fuel imports by 28.9 percent to $10.00 billion.

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The Financial Account underwent a dramatic shift, moving from a net lending position of $9.65 billion in 2024 to a net borrowing position of $1.69 billion in 2025, largely fueled by a 48.3 percent crash in Foreign Portfolio Investment inflows to $8.04 billion.

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Conversely, Foreign Direct Investment inflows saw a robust increase of 149.1 percent, rising to $4.01 billion from $1.61 billion in 2024, indicating long-term investors showed renewed confidence in the Nigerian economy.

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The pressure on the Balance of Payments was further compounded by rising out-payments in the services and primary income accounts, with the deficit in the services account growing to $14.58 billion, driven by increased spending on transport, travel, and insurance.

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Net out-payments in the primary income account surged by 60.9 percent to $9.09 billion, attributed to a spike in dividends and interest payments to non-resident investors, particularly those with portfolio and direct investments in the country.

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Despite the narrowing Balance of Payments surplus, Nigeria's external reserves recorded a healthy accretion of 13.8 percent, ending the year at $45.75 billion, providing a critical buffer for the economy as it navigates structural shifts in its trade and investment balances.

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Nigeria's current account surplus fell year-on-year by 26 percent to $14.04 billion in 2025, down from $19.03 billion in 2024, due to a decrease in crude oil exports, crude oil imports by Dangote Refinery, increase in non-oil imports, and increase in net out-payment for services.

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The decline in the Current Account was driven by a 14.41 percent decrease in crude oil exports from $36.85 billion to $31.54 billion, as well as other factors, including crude oil imports of $3.74 billion by Dangote Refinery and a 13.6 percent increase in non-oil imports to $29.24 billion.