Nigeria’s Economic Reforms Boost Balance of Payments and Foreign Exchange Inflows
Nigeria’s ongoing economic reforms are showing tangible results, as the country records a significant rebound in its Balance of Payments (BOP) and foreign exchange inflows. The Central Bank of Nigeria (CBN) reports a $4.6 billion BOP surplus in the third quarter of 2025, reversing the deficit seen in the previous quarter. Analysts attribute this to improved investor confidence, rising diaspora remittances, stronger trade performance, and reforms in the foreign exchange market, monetary policy, and domestic energy sector.
The country’s external sector has benefitted from targeted measures, including the liberalization of the foreign exchange market, reduced government intervention, and strengthened macroeconomic policies. Crude oil exports rose to $8.45 billion, while refined petroleum exports jumped 44 percent to $2.29 billion, signaling Nigeria’s shift from a net importer to a net exporter of refined petroleum products. Meanwhile, imports of petroleum products fell 12.7 percent, supporting a stronger trade balance and improved external reserves, which grew to $42.77 billion by the end of September 2025.
Financial flows have also strengthened, with foreign direct investment increasing to $0.72 billion and portfolio investment remaining robust at $2.51 billion. Diaspora remittances remain a key pillar, contributing $5.24 billion to the secondary income account. The CBN’s introduction of multiple foreign exchange channels, including licensing new International Money Transfer Operators and enhancing remittance products, has helped attract dollars into the economy while maintaining naira stability.
CBN Governor Olayemi Cardoso emphasized that these reforms are part of a broader strategy to restore macroeconomic stability and sustainable growth. Speaking at the 60th Annual Bankers’ Dinner, he highlighted initiatives such as strengthening the banking system, deepening financial inclusion, modernizing payment systems, and transitioning to an inflation-targeting framework. The steady decline in inflation—from a peak of 34.6 percent in November 2024 to 16.05 percent in October 2025—has helped restore household purchasing power and reinforced policy credibility.
Experts say Nigeria’s reforms have set the stage for long-term economic stability, attracting foreign investment and improving the overall business environment. With the combination of fiscal discipline, improved data analytics, and disciplined monetary policies, Nigeria is gradually moving from crisis management to sustainable economic growth, boosting confidence among investors, businesses, and households alike.
source: Punch