Nigeria’s economy faced significant capital outflows in the first quarter of 2025, as heightened global uncertainties and risk-off sentiment triggered by U.S. tariff threats led offshore investors to pull funds from local debt and equity markets in search of safer assets.
These outflows drove up foreign exchange demand, prompting aggressive interventions by the Central Bank of Nigeria (CBN) to stabilise the naira. The challenging environment also contributed to a sharp drop in personal remittances from Nigerians abroad during the period.
According to provisional Balance of Payments (BoP) data from the CBN, Nigeria recorded a current account surplus of $3.73 billion in Q1 2025. While slightly below the $3.80 billion posted in Q4 2024, it was marginally higher than the $3.69 billion recorded in the same period last year, according to a commentary by Cowry Asset Limited.
Analysts noted that the surplus was supported by a strong performance in the goods account, which rose from $2.62 billion in Q4 2024 to $4.16 billion in Q1 2025. The improvement was driven by a 9.79% increase in export earnings to $13.91 billion, supported by higher oil and gas volumes and improved non-oil exports, while the depreciation of the naira boosted the competitiveness of Nigerian goods in global markets.
Total imports declined to $9.75 billion from $10.05 billion in the previous quarter, reflecting reduced demand for petroleum products and other goods. Gas exports grew by 26.7% to $2.66 billion, while non-oil and electricity exports climbed by 30.4% to $2.66 billion.
The secondary income account remained in surplus at $5.29 billion, although this represented a 17.9% decline from the previous quarter, partly due to lower personal remittances, which fell to $4.93 billion from $5.08 billion.
Meanwhile, net outflows in the services account increased to $3.69 billion from $3.48 billion, reflecting higher spending on travel and business services. The primary income account’s debit balance widened by 13.5% to $2.02 billion, driven by higher interest payments to foreign investors.
On the financial account, a balance of $7.58 billion was recorded, slightly down from $7.82 billion in Q4 2024, with significant movements beneath the headline figures. Portfolio investment activity recorded a sharp reversal of $5.03 billion, indicating substantial capital flight and foreign investor repositioning. Direct investment inflows also dipped to $0.25 billion from $0.31 billion in the previous quarter.
The report highlighted large-scale divestments by non-resident investors from CBN instruments, substantial external debt repayments by the government, and a decline in foreign liabilities held by banks as key drivers of these movements.
Net errors and omissions stood at $3.85 billion, down from $4.02 billion in the previous quarter. Overall, the BoP closed the quarter with a deficit of $2.77 billion, contributing to a drawdown in Nigeria’s external reserves from $40.19 billion at the end of December 2024 to $37.82 billion by the end of March 2025.
“Nigeria’s Q1 2025 current account surplus reflects resilient export performance, helped by stronger oil and non-oil earnings and weaker import demand. However, rising capital reversals and a wider financial account deficit signal persistent investor caution. The overall balance of payments deficit and falling reserves suggest that external pressures remain a key concern,” Cowry Asset noted.
