The Central Bank of Nigeria (CBN) yesterday unveiled a current account surplus of $3.73 billion for the first quarter of 2025, lauding it as evidence of Nigeria’s improving external position.
While marginally higher than the $3.69 billion recorded in Q1 2024, the figure falls short of the $3.80 billion surplus posted in Q4 2024 – signalling that underlying vulnerabilities persist even as headline numbers shine.
At the heart of the positive outturn lies a 30.4 percent surge in non-oil exports, led by gas shipments rising from $2.10 billion to $2.66 billion, coupled with a drop in non-oil imports from $7.37 billion to $6.77 billion.
The CBN pointed to naira depreciation as a boon for exporters, boosting export competitiveness and lifting total export earnings to $13.91 billion, a 9.8 percent year-on-year rise. However, such gains are tempered by persistently weak oil production and limited diversification beyond hydrocarbons.
Despite the modest surplus, Nigeria’s overall balance of payments swung to a $2.77 billion deficit in Q1 2025, reflecting heavy outflows in services and income accounts.
Net out-payments in the services component rose to $3.69 billion, up from $3.48 billion in Q4 2024, while the primary income account recorded a debit of $2.02 billion, a 13.5 percent increase, underscoring persistent profit repatriation by foreign investors.
This latest surplus contrasts sharply with Nigeria’s full-year $6.83 billion balance of payments surplus in 2024, hailed at the time as a vindication of President Tinubu’s reform agenda, including fuel subsidy removal and exchange rate unification.
Yet first-quarter figures this year reveal that one-off boosts from policy changes may be wearing thin, as both export volumes and import compression approach their limits.
Historically, Nigeria’s external position has swung wildly: from a $9.6 billion current account surplus in 2005 – equivalent to over 30 percent of GDP at the time – to record deficits exceeding $6 billion in 2019.
The Q1 2025 surplus, equal to barely a fraction of Nigeria’s $500 billion economy, underscores the economy’s ongoing dependency on volatile commodity markets and short-term capital flows.
With secondary income inflows down 17.9 percent year-on-year, due in part to a reduction in foreign aid and grants, and remittances under pressure, the sustainability of the current surplus remains in doubt.
Unless Nigeria accelerates genuine economic diversification, strengthens non-oil value chains and stabilises its exchange rate, future external balances may once again veer into deficit – jeopardising growth and stoking inflationary pressures at home.
