Nigeria achieved a $3.73 billion balance of payments (BOP) surplus in the first quarter of 2025, fueled by naira depreciation and increased domestic fuel production from the Dangote Refinery, according to economic experts and data from the Central Bank of Nigeria (CBN). The surplus, though slightly lower than the $3.80 billion recorded in Q4 2024, marks an improvement from the $3.69 billion in Q1 2024.
Trade Performance Boosts Surplus
The CBN reported a robust goods account balance of $4.16 billion in Q1 2025, up from $2.62 billion in the previous quarter. This growth was driven by a 9.79% rise in total exports, which reached $13.91 billion, with non-oil exports surging 30.39% to $2.66 billion and gas exports climbing from $2.10 billion to $2.66 billion. Imports, meanwhile, dropped to $9.75 billion from $10.05 billion, primarily due to reduced non-oil and petroleum product imports, reflecting the impact of the Dangote Refinery’s ramped-up domestic fuel supply.
The National Bureau of Statistics (NBS) corroborated this, reporting a N5.17 trillion trade surplus in Q1 2025, a 51.07% increase from N3.42 trillion in Q4 2024. Total trade volume grew by 6.19% to N36.02 trillion, while petrol imports plummeted from N3.81 trillion in Q1 2024 to N1.76 trillion, largely due to the refinery’s contributions.
Naira Depreciation and Domestic Production
Experts attribute the BOP surplus to the naira’s depreciation, which has made imports costlier and boosted export competitiveness. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), noted, “The naira’s depreciation has made imports more challenging, reducing non-oil imports significantly.” He also highlighted the role of the Dangote Refinery, stating, “With its full operations, fuel importers are increasingly sourcing locally, supporting the trade balance.”
Dr. Adam Abudu of the Society for Peacebuilding and Economic Advancement emphasized the need for consistent government policies to support domestic investors like the Dangote Refinery. “The refinery’s production for both domestic use and export is a game-changer,” he said, urging the government to replicate such initiatives to sustain the BOP surplus. He also praised President Bola Tinubu’s reforms, which have contributed to two consecutive quarters of positive BOP performance, adding, “Maintaining this momentum is crucial.”
Challenges in Financial Account and Reserves
Despite the positive trade performance, the financial account weakened to $7.58 billion in Q1 2025 from $7.82 billion in Q4 2024, driven by a sharp decline in portfolio investments and loan liabilities. Significant divestments by non-residents from CBN bills and increased external debt servicing further strained the account. Net errors and omissions, reflecting untracked financial flows, stood at $3.85 billion, slightly down from $4.02 billion in Q4 2024.
Nigeria’s external reserves also fell to $37.82 billion by March 2025, down from $40.19 billion in December 2024, signaling pressure from capital outflows and debt repayments. Additionally, the Nigerian Upstream Petroleum Regulatory Authority (NUPRC) reported a decline in crude oil production to 1.45 million barrels per day in May 2025, which could pose future challenges to export earnings.
Economic Outlook
The $3.73 billion BOP surplus underscores Nigeria’s ability to generate higher export revenues than imports, bolstered by the Dangote Refinery and favorable exchange rate dynamics. However, experts warn that sustaining this surplus requires addressing challenges like forex volatility, declining oil production, and capital outflows. Strengthening domestic industries, supporting non-oil exports, and maintaining policy consistency will be key to ensuring long-term economic stability.
