Nigeria's Current Account Surplus Declines Significantly in 2025
The Central Bank of Nigeria has released its 2025 Balance of Payments report, revealing a substantial drop in the country's current account surplus. According to the data, the surplus decreased by 26 percent year-on-year, falling to $14.04 billion in 2025 from $19.03 billion in 2024. This decline highlights growing challenges in Nigeria's external economic position.
Key Drivers Behind the Decline
Several factors contributed to this sharp reduction. Crude oil exports, a major revenue source, dropped by 14.41 percent to $31.54 billion from $36.85 billion in the previous year. Concurrently, Dangote Refinery imported $3.74 billion worth of crude oil, adding to the pressure. Non-oil imports also rose by 13.6 percent to $29.24 billion, while net out-payments for services increased by 9.13 percent to $14.58 billion.
Analysis of Account Components
Despite the overall decline, the goods account, which is the primary component of the current account, remained in surplus. It posted $14.51 billion in 2025, up from $13.17 billion in 2024. However, the financial account recorded a net borrowing of $1.69 billion, a reversal from a net lending of $9.65 billion in 2024.
The services account deficit expanded, reflecting higher net payments for transport, travel, insurance, and government services. Additionally, the primary income account deficit surged by 60.9 percent to $9.09 billion, largely due to increased dividend and interest payments to non-resident investors.
Secondary Income and Remittances
The secondary income account saw a slight decrease to $23.20 billion from $24.88 billion in 2024, as both Official Development Assistance and personal transfers declined. Nevertheless, workers' remittances continued to be a crucial source of inflow, supporting Nigeria's foreign exchange reserves and providing some stability amid the downturn.
Banking Sector's Role in Economic Growth
In related developments, Nigeria's banking sector is positioning itself as a key driver in the country's ambition to achieve a $1 trillion economy. Following a successful recapitalization exercise, the financial system has been strengthened. Central Bank Governor Olayemi Cardoso, speaking at the Africa Capital Forum in London, emphasized that 32 banks met the new capital requirements, marking a turning point for the sector.
Cardoso highlighted that this transformation has enhanced the banking sector's capacity to mobilize capital for economic growth. He noted increased diaspora remittances, which are helping to diversify foreign exchange reserves and make them more resilient to global volatility. The governor assured investors of the CBN's commitment to stability, improved communication, and reinforced institutional frameworks to avoid past policy inconsistencies.
Implications and Future Outlook
The report underscores ongoing pressures on Nigeria's external accounts, despite resilience in the goods sector. The rise in imports and service outflows continues to impact the current account balance. Moving forward, closer collaboration between monetary and fiscal authorities is deemed essential to enhance the effectiveness of reforms and support sustainable economic growth.
