Nigeria's Economy Gets Massive Boost: FX Inflows Hit Staggering $109.9 Billion

Nigeria experienced a substantial surge in its financial landscape during 2025, as detailed in the Central Bank of Nigeria’s (CBN) Annual Report and Statement of Accounts. Total foreign exchange (FX) inflows reached an impressive $109.86 billion, marking a 13.81% increase from $96.53 billion recorded in 2024. This growth was primarily fueled by autonomous sources, which contributed significantly to the nation's FX liquidity.

Despite the notable increase in inflows, total FX outflows also rose, reaching $49.05 billion in 2025, up 27.83% from $38.37 billion in the previous year. Nevertheless, Nigeria maintained a robust net FX inflow of $60.81 billion, slightly surpassing the $58.16 billion reported in 2024. Autonomous sources were instrumental in driving this positive trend, accounting for 64.21% of total inflows, with a 25.12% increase to $70.54 billion from $56.38 billion in 2024. This was largely due to stronger non-oil export earnings, higher capital importation, and increased over-the-counter FX purchases. Conversely, inflows through the CBN saw a marginal decline of 2.08% to $39.32 billion, representing 35.8% of total FX inflows, primarily attributed to lower receipts from government debt and reduced foreign exchange swap transactions. Autonomous sources generated a net inflow of $54.28 billion, while the CBN recorded a net inflow of $6.52 billion, underscoring the growing influence of market-driven FX sources in stabilizing Nigeria's FX market.

Regarding outflows, a notable increase in foreign exchange demand was observed. Outflows through the apex bank increased modestly by 1.74% to $32.79 billion, while autonomous outflows surged by 164.84% to $16.26 billion, indicating heightened activity across private-sector channels. Foreign exchange utilization also grew significantly by 59.36% to $42.83 billion from $26.88 billion in 2024, predominantly driven by higher invisible imports. Visible imports constituted $18.76 billion, or 43.8% of total FX utilization, up from $15.62 billion a year prior. The industrial sector remained the dominant user of FX for visible imports at 42.11%, followed by the oil sector (25.91%), manufactured products (15.64%), and food products (10.51%). Other sectors, including transport, mineral, and agricultural, accounted for 3.78%, 1.04%, and 1.00%, respectively.

Further analysis of FX utilization revealed mixed trends across sectors. The amount utilized for oil sector imports surged by 114.91% to $4.86 billion. Utilization for manufactured products rose by 61.70% to $2.93 billion, for the transport sector by 52.17% to $0.71 billion, and for the agricultural sector by 20.71% to $0.19 billion. However, the industrial sector experienced a slight decrease of 0.76% to $7.90 billion, while utilization for food products and minerals declined by 22.01% and 54.85% to $1.97 billion and $0.19 billion, respectively, compared to 2024 levels. The overall increase in net FX inflows highlights the crucial role of autonomous sources in enhancing foreign exchange liquidity and bolstering the country's external sector.

Nigeria’s external reserves also demonstrated robust growth, increasing by 13.85% to $45.75 billion at the end of December 2025. This accretion was largely attributed to crude oil-related taxes, third-party receipts, and FX purchases. An assessment indicated adequate reserve levels, capable of financing 8.77 months of import for goods and services, or 13.33 months for goods only, significantly exceeding the international benchmark of 3.0 months. Furthermore, the ratio of external reserves to the money supply (M3) stood at 54.31%, well above the international benchmark of 20.00%. Based on the Greenspan-Guidotti measure, the ratio of external reserves to short-term liabilities was 103.81%, surpassing the 100.00% benchmark. At the close of December 2025, the CBN owned $43.14 billion (94.29%) of the external reserves, while the Federal Government held $2.61 billion (5.71%).

Beyond foreign exchange, Nigeria's digital payments ecosystem continued its impressive expansion. Electronic payment transactions soared to N3.46 quadrillion (N3,458.77 trillion) in 2025, representing a 26.07% increase, with transaction volume rising by 2.62% to 47.88 billion transactions. This growth was attributed to evolving user preferences, broader adoption of digital channels, the expansion of e-commerce, and ongoing infrastructure improvements. A breakdown of transaction volumes by channels showed ATM transactions recorded the strongest growth, up 61.94% to 1.66 billion. USSD transactions increased by 20.89% to 669.55 million, and Point-of-Sale (PoS) transactions grew by 19.78% to 15.66 billion. However, decreases were noted in transactions through mobile apps, internet/web, and direct debits.

Improvements in payment security were also significant. Electronic fraud losses declined sharply by 50.5% to N25.85 billion in 2025, down from N52.26 billion in the preceding year. This reduction reflects enhanced monitoring systems, successful BVN-NIN integration, and tighter controls across the payment service providers (PSPs). The Bank Verification Number (BVN) ecosystem continued to grow, with enrolments increasing to 67.82 million from 64.40 million in 2024, and the number of bank accounts linked to BVN rising sharply to 368.92 million from 297.29 million. Active bank accounts also increased to 339.26 million from 311.60 million. Fraud-related BVNs placed on the watch-list increased to 13,117 from 9,476, while BVNs classified as belonging to deceased persons rose to 28,754 from 21,118, further demonstrating improved fraud monitoring and resolution.

Finally, the Pan-African Payment and Settlement System (PAPSS) played a growing role in facilitating cross-border transactions for Nigerian participants. The value of transactions settled on PAPSS surged almost fivefold to $143.40 million in 2025 from $29.23 million in 2024, with transaction volume rising to 44,088 from 17,808. PAPSS aims to streamline cross-border transactions across African markets by reducing the cost and complexity of foreign-exchange conversions, easing pressure on current accounts, diminishing demand for foreign exchange liquidity, and fostering financial inclusion and economic growth through intra-African trade. By the end of 2025, 20 Nigerian banks were participating in PAPSS, down slightly from 22 in 2024.