In February 2025, the Central Bank of Nigeria (CBN) recorded a 17.2% year-on-year increase in international payments, totaling $497.91 million. This marks a significant rise from the $424.96 million recorded in February 2024. The growth was primarily driven by a sharp 220.8% rise in direct remittance payments, which reached $125.58 million, up from $39.15 million a year earlier. Direct remittances now make up 25.2% of total international transactions, reflecting higher remittance inflows from the Nigerian diaspora.
Despite the growth in remittances, other categories such as debt service and letters of credit saw declines. Debt service payments dropped by 2.3% to $276.73 million, while letters of credit payments decreased by 6.8% to $95.59 million. The decline in these areas is attributed to reduced imports, which have been affected by weaker consumer demand. On a month-on-month basis, international payments facilitated by the CBN fell by 24.5% compared to January 2025, reflecting a temporary slowdown.
Analysts at Cordros Research have forecast that international payments will likely remain elevated, driven by the Nigerian government’s debt obligations. They also anticipate that improved foreign exchange liquidity will lead to stronger consumer demand, potentially boosting imports and increasing payments for both letters of credit and remittances. This aligns with expectations of continued growth in international transactions over the coming months.
The sustained rise in remittances is seen as a positive development for Nigeria’s economy. It is expected to support GDP growth, infrastructure investments, and human capital development. Moreover, remittances are fostering small and medium-sized enterprises (SMEs), creating jobs, and stimulating economic activity. However, analysts emphasize the need for policies that ensure remittance funds are used productively, such as investments in education, infrastructure, and entrepreneurship, while managing challenges like brain drain and currency appreciation.
Source: the sun