Foreign exchange utilisation in Nigeria surged by 74 per cent year-on-year to $16.35 billion in the first quarter of 2026, up from $9.34 billion recorded in Q1 2025, as activity in the formal forex market picked up significantly. Data from the Central Bank of Nigeria’s (CBN) Quarterly Statistical Bulletin showed that the sharp increase was largely driven by stronger demand for invisible transactions.
Invisible transactions more than doubled during the period, rising to $11.39 billion from $4.49 billion a year earlier and accounting for about 70 per cent of total forex utilisation. Financial services took the lead, with forex utilisation in the sector jumping 117 per cent to about $9 billion, while business services also recorded a major increase, reaching $1.2 billion compared with $223.6 million in Q1 2025.
The surge became more pronounced as the quarter progressed. Monthly forex utilisation climbed from $1.78 billion in January to $2.78 billion in February and $4.42 billion in March, making March the strongest month in the quarter. Meanwhile, forex utilisation for merchandise imports remained almost unchanged at $4.9 billion, increasing just 0.2 per cent year-on-year. Industrial-sector utilisation, however, fell 20 per cent to $1.8 billion, even as manufactured products and transport products recorded higher utilisation.
Analysts said the stronger forex activity points to improving liquidity in the formal market, but warned that the sustainability of forex supply will determine whether the trend continues. Cordros Research expects visible imports to remain relatively constrained as domestic refining expands, while improved macroeconomic conditions and continued CBN measures could support forex liquidity. Cowry Asset Management similarly said stronger reserves, CBN reforms and improved market liquidity could encourage further growth in formal forex transactions.
Beyond the headline increase, analysts said the composition of forex demand will be critical. A sustained shift towards industrial inputs, machinery and capital goods would provide a stronger indication that rising forex utilisation is translating into productive economic activity. With forex demand recovering alongside improved market capacity, maintaining liquidity and exchange-rate stability will remain important for businesses and the broader Nigerian economy through 2026.
source: Leadership
