CBN: Export gains drive $50.67bn inflow in 1 year

By Chinwendu Obienyi

Nigeria’s foreign exchange market recorded a sharp improvement in dollar liquidity in 2025, as rising export earnings, stronger investor confidence and attractive carry-trade opportunities lifted total inflows to their highest level in years.

According to data from FMDQ Securities Exchange, total inflows into the Nigerian Foreign Exchange Market (NFEM) rose by 62.9 per cent year on year (y/y) to $50.67 billion in 2025, up from $31.11 billion recorded in 2024, marking a significant turnaround for Africa’s largest economy following prolonged foreign-exchange shortages.

The improvement was underpinned largely by stronger export receipts, reflecting higher crude oil production, improved pricing conditions and growing non-oil export activity. Commenting on the development, economic analysts stated that the rebound in export inflows has helped stabilise market liquidity and narrow volatility in the naira, which has faced sustained pressure over the past two years.

Data also point to continued momentum toward the end of the year. Specifically, total inflows into the NFEM increased by 17.5 per cent month on month (m/m) to USD3.37 billion in December, compared with USD2.87 billion in November, according to FMDQ.

Local sources accounted for the bulk of inflows, representing 74.9 per cent of the total, while foreign sources contributed the remaining 25.1 per cent.

Inflows from domestic sources rose by 24.2 per cent m/mm to $2.52 billion in December, supported by increased participation from the Central Bank of Nigeria (CBN), individuals and exporters.

Furthermore, CBN-related inflows jumped by 51.7 per cent, while inflows from individuals and exporters/importers increased by 36.9 per cent and 32.8 per cent, respectively. These gains offset weaker activity from non-bank corporates, which declined by 8.9 per cent during the month.

Also, foreign inflows edged higher by 1.2 per cent m/m to $847.4 million. The marginal increase was driven by a surge in foreign direct investment, which more than doubled from the previous month, and higher inflows from other corporate investors.

However, portfolio investment inflows declined by 7.9 per cent, reflecting lingering caution among offshore investors amid global monetary tightening and geopolitical risks. Cordros Research in an emailed note, said, “Looking ahead, we expect inflows from both domestic and foreign sources to remain robust, supported by rising exports, sustained market confidence and still attractive carry-trade opportunities.

Although the country’s benchmark interest rates remain among the highest in emerging markets, helping to support inflows into short-dated instruments despite continued concerns over inflation and fiscal pressures.

The improvement in FX inflows reflects better price discovery, improved confidence in the market framework and stronger export performance. While portfolio flows remain selective, the overall liquidity picture has clearly strengthened.

Although challenges remain, the increase in supply has helped moderate volatility and improve dollar availability for trade and investment purposes.

However, analysts caution that global risk sentiment, oil price fluctuations and domestic inflation dynamics will remain key determinants of the pace and durability of foreign inflows.

For now, the $50.67 billion inflow recorded in 2025 signals a meaningful recovery in Nigeria’s FX market and offers cautious optimism that recent reforms are beginning to translate into tangible improvements in dollar liquidity.