The Balance of Payments (BOP) surplus, the ongoing surge in diaspora remittances and continued accretion to external reserves are direct outcomes of crucial financial sector reforms. The $4.60 billion BOP surplus recorded in the third quarter of 2025 marks a sharp turnaround from the deficit position in the previous quarter. This performance highlights strengthening external sector fundamentals, growing investor confidence, and the sustained impact of reforms in the foreign exchange market, monetary policy implementation and the domestic energy sector, reports Assistant Editor COLLINS NWEZE
The monetary and fiscal authorities have made remarkable strides in restoring macroeconomic stability, bringing down inflation, enhancing data analytics, ending the practice of monetary financing of deficits, and narrowing the foreign exchange (FX) market gap to under two per cent. Central Bank of Nigeria (CBN) reforms have played a pivotal role in organically rebuilding FX reserves, which are projected to surpass $51 billion this year, driven by stronger non-oil export performance and improved market functioning. These reforms have also spurred growth in key economic sectors and attracted a notable surge in foreign capital inflows.
Reflecting these gains, Nigeria recorded a Balance of Payments (BOP) surplus of $4.60 billion in the third quarter of 2025, a turnaround from the deficit recorded in the preceding quarter, according to CBN data. The improvement was underpinned by a sustained current account surplus of $3.42 billion, supported by robust trade performance, resilient remittance inflows, higher financial flows, and continued accretion to external reserves. The goods account remained in surplus at $4.94 billion, reflecting higher export earnings and strengthened economic fundamentals during the period.
“Exports increased to US$15.24 billion in Q3 2025, from US$14.90 billion in Q2 2025, on account of increases in crude oil and a refined petroleum products exports. The country is gradually switching from a net importer of refined petroleum products to a net exporter. Import of petroleum products decreased by 12.7 per cent to US$1.65 billion,” the CBN said.
Also, net out payments in the services account increased to US$4.07 billion in Q3 2025, from US$3.74 billion in Q2 2025. “The increase in net out- payments for services was due to increases in net import of transport, travel, insurance, computer & information, other business, and Government services not included elsewhere. The debit balance in the primary income account increased significantly to US$2.95 billion in Q3 2025, from US$1.25 billion in Q2 2025,” the report said.
“This was largely attributable to repatriation of reinvested earnings by domestic banks on their foreign investments abroad especially on direct investments. The secondary income account balance decreased slightly to US$5.50 billion in Q3 2025, from US$5.51 billion in the preceding quarter. Personal transfers (workers’ remittance) from Nigerians in diaspora slightly decreased in Q3 2025 to US$5.24 billion, from US$5.30 billion in Q2 2025,” it added.
Crude oil exports rose to $8.45 billion, while exports of refined petroleum products increased by 44 per cent to $2.29 billion, indicating further progress in domestic refining capacity and Nigeria’s gradual transition from a net importer to a net exporter of refined petroleum products. Total goods exports stood at $15.24 billion, while imports of refined petroleum products declined by 12.7 per cent, resulting in an improved trade balance.
Workers’ remittances also remained strong, with the secondary income account recording a surplus of $5.50 billion, including $5.24 billion in remittance inflows from Nigerians in the diaspora. Developments in the financial account further supported the overall BOP outcome, with Nigeria posting a net lending position of $0.32 billion.
Foreign direct investment inflows rose to $0.72 billion, while portfolio investment inflows remained robust at $2.51 billion, reflecting improved investor sentiment and continued non-resident participation in domestic financial instruments. The country’s external reserves increased to $42.77 billion at end-September 2025, up from $37.81 billion at end-June, thereby strengthening Nigeria’s external buffers.
According to the CBN, the Q3 2025 BOP outcome underscores strengthening external sector fundamentals, firmer investor confidence, and the continued impact of reforms in the foreign exchange market, monetary policy implementation, and the domestic energy sector. CBN Governor, Olayemi Cardoso had earlier reaffirmed that the banking system remains resilient, with continued vigilance on emerging risks. At the 60th Annual Bankers’ Dinner, he outlined the Bank’s 2026 priorities which include strengthening the banking system, ensuring price stability, modernising payments, deepening financial inclusion and supporting responsible fintech innovation.
He also noted growth in digital payments, expansion of contactless cards, improved agent-banking controls, and Nigeria’s exit from the FATF grey list as major confidence boosters. He concluded by restating the bank’s commitment to disciplined, transparent, and forward-looking policies to keep Nigeria’s economy stable and positioned for sustainable growth.
Journey through reforms
The CBN had embarked on a series of bold reforms to attract more foreign capital to the economy, achieve price and exchange rate stability. In 2023, the new administration, alongside the CBN under Governor Cardoso, implemented landmark reforms to stabilise the economy. The authorities liberalised the foreign exchange market, ended central bank financing of the fiscal deficit, and reformed fuel subsidies. Simultaneously, the government strengthened revenue collection and took targeted measures to rein in the surging inflation rate. Since these reforms were implemented, international reserves have increased, and people can now access foreign exchange in the official market.
Besides, Nigeria successfully returned to international capital markets last December and was recently upgraded by rating agencies. A new domestic, private refinery is positioning Nigeria up the value chain in a fully deregulated market. CBN’s policies, including the currency reforms, led to investment inflows from abroad and reduced interventions in the domestic forex market. The unification of exchange rates and the clearing of over $7 billion FX backlog raised the country’s investment outlook, with multilateral organizations, like the World Bank describing it as bold intervention to improve the economy’s sustainability in the long run.
Also, Nigeria’s sovereign risk spread has fallen to the lowest level since January 2020, erasing the premium accumulated during the pandemic and subsequent strain on its economy. All these are deliberate efforts to woo investors and sustain capital inflows to the economy. In its efforts to tame inflation, the CBN recently hosted the Monetary Policy Forum 2025, featuring fiscal authorities, legislative, private sector, development partners, subject-matter experts, and scholars with the theme: “Managing the Disinflation Process.” The forum is a major push to improve monetary policy communication, foster dialogue, and collaborate on critical issues shaping monetary policy.
During the event, Cardoso explained that the apex bank’s focus is to sustain price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship. He said the apex bank is continuing its disciplined approach to monetary policy, aimed at curbing inflation and stabilising the economy. Cardoso reiterated that the goal of the CBN is to ensure that monetary policy remains forward-looking, adaptive, and resilient.
In addressing our economic challenges, collaboration is key: “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence. Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” Cardoso said.
The CBN also focused on strengthening the banking sector, introducing new minimum capital requirements for banks (effective March 2026) to ensure resilience and position Nigeria’s banking industry for a $1 trillion economy. These reforms and developments reflect the Bank’s commitment to creating an enabling environment for inclusive economic development.
However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance. “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Cardoso stated.
Continuing, he said monetary policy easing became necessary following a review of macroeconomic developments. According to him, the decision by the MPC to ease the policy stance was made in the light of improving inflation trends. “The committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025 and the need to support economic recovery efforts,” Cardoso said.
Forex sources expand
The CBN under Cardoso is cultivating multiple FX sources to increase dollar inflows, boost dollar access to manufacturers and retail end users. From moves to improve diaspora remittances through new product development, the granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller FX model, and enabling timely access to naira liquidity for IMTOs, the apex bank has simplified dollar-inflow channels for authorized dealers and other players in the value chain. The move has led to substantial accretion to the gross FX reserves and supported the stability of the naira. Given that FX inflows to the economy are strategic in achieving monetary and fiscal policy stability, the CBN under Cardoso puts in a lot of efforts in attracting more inflows into the economy.
Diaspora remittances to Nigeria, estimated at $23 billion annually remain a reliable source of forex to the domestic economy. There are also other sources and policies that are being explored by the apex bank to keep dollar inflows coming. The CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.
Remittances into the economy are expected to rise further, supported by the CBN’s ongoing efforts to strengthen public confidence in the foreign exchange market, build a robust and inclusive banking system, and promote price stability—measures that are critical for sustaining long-term economic growth. Director of Trading at Verto, Charlie Bird, said dollar liquidity dynamic is now more balanced, with foreign investors and airlines able to repatriate funds. Speaking during Cordros Asset Management seminar titled: “The Naira Playbook,” he said Nigeria is now darling of foreign investors because of improved dollar liquidity in the economy due to positive CBN’s reforms.
Economic gains through reforms
According to Cardoso, over the past 12 months, Nigeria’s economy has transitioned from crisis management to laying the groundwork for a sustainable recovery. “After nearly a decade in which real GDP growth averaged about 2%, reforms have restored momentum and confidence in our broad macroeconomic environment. Our economy grew by 4.23 per cent in the second quarter of 2025, the strongest pace in four years, driven by improvements in telecommunications, financial services, and oil production,” he said.
“More importantly in terms of long-term stability, inflation, while still high, has moderated consistently. From a peak of 34.6 per cent in November 2024, it has more than halved to 16.05 per cent in October 2025. This marks seven consecutive months of disinflation. Food inflation, the largest single component of the basket, fell to 13.12 per cent in October, down from 16.87 per cent in September and 21.87 per cent in August,” he said.
This significant, steady decline in inflation is restoring real purchasing power for households and businesses. It also demonstrates disciplined execution and Nigeria’s return to orthodox monetary policy. “We continue with determination to bring inflation down further. The current double-digit rate cannot be acceptable. Price stability is the foundation of sustainable growth. Our transition to an inflation targeting framework is gaining traction. We have improved data analytics, strengthened communication, and ended monetary financing of fiscal deficits. These actions have strengthened monetary policy transmission and anchored expectations.”
