Remittances Decline Amid FX Leakages
Nigeria's diaspora remittances dropped to $5.30 billion in the first quarter of 2026, down from $5.72 billion in the fourth quarter of 2025, according to the Central Bank of Nigeria's (CBN) Q1 2026 balance of payments report. The decline represents a 7.3% quarter-on-quarter decrease and highlights persistent challenges in the foreign exchange market.
Stakeholders attribute the fall to prevalent FX leakages that have undermined formal channels for foreign currency transactions, limiting inflows from the diaspora. The CBN report noted: "FX leakages continue to undermine formal channels and distort prices in this market as such many transfers to the economy outside direct intervention, and limit the extent of diaspora contributions to dollar liquidity. The implications are that stronger remittances are often limited in scope."
Current Account Surplus Surges
Despite the setback in diaspora transfers, Nigeria's external position strengthened significantly in Q1 2026. The current account surplus widened dramatically by 255.7% quarter-on-quarter to $4.98 billion, up from $1.40 billion in Q4 2025. This growth was driven by stronger hydrocarbon exports and a sharp decline in petroleum imports.
Crude oil exports rose to $8.11 billion, natural gas exports increased to $2.53 billion, and refined petroleum exports climbed to $2.37 billion. Meanwhile, refined petroleum imports dropped 87.5% to $310 million, supporting a wider goods surplus of $5.95 billion. Total exports increased to $15.49 billion, while imports declined to $9.54 billion.
External Reserves Reach $48.35 Billion
The stronger external position lifted Nigeria's foreign reserves to $48.35 billion from $45.75 billion at the end of 2025, improving the CBN's capacity to manage FX pressures and support economic stability. The apex bank added: "With declining remittances coupled with increasing outflows under the service accounts this could potentially limit the overall gain in the external sector position."
Direct investment (net capital inflows) remained subdued during the period due to concerns about the economic investment environment, while borrowing (net financial inflows) increased.
Naira Appreciates by 0.55%
Earlier reports indicated that the naira strengthened against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEX), appreciating by 0.55% due to bolstered external reserves and steady FX inflows. At the official window, the currency strengthened by N7.56 to close at N1,356.27/$1, compared to N1,363.83/$1 on the previous trading day.
The CBN data underscores the dual challenge of declining remittances and the need to sustain external sector gains through diversified export earnings and improved investment inflows.
