KEY POINTS

• Total foreign exchange utilisation in Nigeria increased to $18.3 billion in Q2 2026, up from $16.2 billion in Q1 and $12 billion a year earlier.
• Invisible transactions accounted for 72 per cent of total utilisation, reaching $13.2 billion.
• Financial services was the largest user of foreign exchange, accounting for $9.6 billion.
• Industrial activities accounted for the largest share of FX utilisation for goods, while demand for manufactured goods fell by 15 per cent.
• Analysts at Quest Merchant Bank expect utilisation to increase further, supported by improved foreign exchange liquidity and rising external reserves.

MAIN STORY

Nigeria’s foreign exchange utilisation rose to $18.3 billion in the second quarter of 2026, reflecting increased demand for foreign currency across financial services, business operations and merchandise imports.

The figure represents a 13 per cent increase from the $16.2 billion recorded in the first quarter and a 52.5 per cent rise from $12 billion in the corresponding period of 2025, according to the Central Bank of Nigeria’s latest Quarterly Statistical Bulletin.

Invisible transactions accounted for most of the increase, rising by 16 per cent quarter-on-quarter to $13.2 billion. This represented 72 per cent of total foreign exchange utilisation, compared with $5.1 billion, or 28 per cent, for goods.

The trend marks the fifth consecutive quarter in which foreign exchange demand for invisible transactions exceeded demand for goods.

Financial services remained the largest category within invisibles, accounting for $9.6 billion, an 8 per cent increase from the preceding quarter. The amount represented 73 per cent of foreign exchange used for invisible transactions and 53 per cent of total utilisation in the quarter.

The category covers demand associated with cross-border financial transactions, offshore investments, trade finance and foreign investor repatriation.

Business services, the second-largest category within invisibles, also recorded an increase, with utilisation rising to $1.7 billion from $1.2 billion in the first quarter.

THE ISSUES

The figures show that Nigeria’s foreign exchange demand is increasingly concentrated in services and financial transactions rather than merchandise imports alone.

Within the goods segment, the industrial sector was the largest user of foreign exchange, accounting for $1.9 billion, or 37 per cent of total utilisation for goods. This was broadly unchanged from the previous quarter.

However, utilisation for manufactured goods declined by 15 per cent to $982 million from $1.2 billion in Q1 2026.

Industrial and manufactured goods together accounted for more than half of foreign exchange used for merchandise imports, highlighting the continued dependence of domestic producers on imported raw materials, machinery and intermediate inputs.

This dependence leaves manufacturers exposed to changes in foreign exchange availability and import costs. Higher costs for imported production inputs can increase operating expenses and put pressure on the prices of locally manufactured goods.

The report also links increased import costs to renewed pressure on global supply chains following the US-Iran conflict.

WHAT’S NEXT

Quest Merchant Bank’s analysts expect foreign exchange utilisation to increase further in coming quarters, supported by the CBN’s efforts to improve market liquidity and sustain foreign currency supply.

The outlook is also supported by stronger external reserves. Nigeria’s gross external reserves rose by 21.2 per cent year-to-date to $55.2 billion, their highest level in 18 years, according to the analysis.

The increase in reserves and improved access to foreign currency have supported the steady rise in utilisation since the third quarter of 2024.

BOTTOM LINE

Nigeria’s $18.3 billion foreign exchange utilisation in Q2 2026 reflects stronger demand across the economy, particularly for financial and business services. While improved liquidity and higher reserves support the outlook, the continued dependence of manufacturers on imported inputs means foreign exchange costs remain an important factor for domestic production and business profitability.