Nigeria’s external sector faced renewed strain in Q4 2025, as the Central Bank of Nigeria reported a sharp 65.5% drop in the current account surplus to $1.40 billion from $4.06 billion in Q3.
The overall balance of payments (BOP) also weakened, posting a surplus of only $2.67 billion compared with $4.60 billion three months earlier.
Provisional figures released by the apex bank on Wednesday paint a picture of an economy still overwhelmingly tethered to volatile crude oil revenues, even as remittances and short-term foreign capital provided some breathing room.
The goods account, the largest component of the current account, bore the brunt of the deterioration. Its surplus shrank 60.93% to $1.77 billion from $4.53 billion in Q3, as total exports fell to $13.36 billion from $15.31 billion.
Crude oil exports, Nigeria’s lifeline, dropped 20.54% to $6.77 billion. Refined petroleum exports also slipped 13.97% to $1.97 billion. Meanwhile, non-oil imports surged 24.93% to $8.77 billion, widening the import bill and squeezing the trade position further.
The primary income account (dividends and interest paid to foreign investors) widened its deficit by 47.30% to $3.27 billion—a clear sign of profit repatriation by foreign portfolio and direct investors.
Services outflows narrowed modestly to $3.32 billion from $3.95 billion, offering slight relief. However, the real cushion came from the secondary income account, where diaspora remittances climbed to $6.21 billion, helping to prevent an outright current-account deficit.
On the financial side, net borrowing rose to $1.96 billion (from $0.79 billion), while portfolio investment inflows more than doubled to $5.27 billion, reflecting renewed foreign interest in Nigerian bonds and equities.
Foreign direct investment, however, disappointed, falling to $1.11 billion from $1.46 billion—underscoring that long-term capital remains cautious.
The one unambiguously positive note: external reserves continued their upward march, climbing 6.97% to $45.75 billion by end-December 2025, up from $42.77 billion in September. (Gross reserves stood at approximately $45.71 billion for the year-end, according to related CBN disclosures.)
The CBN itself was blunt in its statement:
“Provisional balance of payments (BOP) statistics for Q4 2025 show a lower current account surplus of US$1.40 billion, which was significantly lower than the US$4.06 billion and US$4.98 billion recorded in the preceding quarter (Q3 2025) and corresponding period of 2024, respectively.”
For the full year 2025, Nigeria still posted an overall BOP surplus of roughly $4.23 billion, down from $6.83 billion in 2024—but the sharp Q4 deceleration is a loud warning bell.
Analysts will be watching three things closely in 2026:
- OPEC+ production cuts ease, and domestic oil output rebounds above 1.5 million barrels per day.
- If the naira’s relative stability and CBN’s FX reforms can keep non-oil imports in check.
- If the strong remittance and portfolio inflows of late 2025 prove durable.
Until Nigeria diversifies its export base beyond crude and refined products, these quarterly swings will remain the norm rather than the exception. The external sector is stabilizing—but it is far from secure.
WHAT YOU SHOULD KNOW
Nigeria’s external accounts weakened sharply in Q4 2025, with the current account surplus plunging 65.5% to just $1.4 billion. The single most important takeaway is this: falling crude oil export earnings remain the dominant driver of Nigeria’s external vulnerability.
Despite support from strong remittances ($6.21bn), surging portfolio inflows, and rising reserves ($45.75bn), the 20.5% drop in oil receipts and surging non-oil imports exposed once again how heavily the economy still depends on a single, volatile commodity.
Until export diversification takes hold, these sharp quarterly swings will continue to threaten external stability.
