International payments facilitated by CBN hit $497m in February

By Chinwendu Obienyi

The Central Bank of Nigeria (CBN) has reported a 17.2 per cent year-on-year (y/y) increase in international payments in February 2025, reaching $497.91 million compared to $424.96 million in February 2024.

This growth was driven by a significant rise in direct remittance payments, which accounted for 25.2 per cent of total international transactions, while debt service and letters of credit payments declined.

Specifically, direct remittance payments rose by 220.8 per cent y/y to $125.58 million (February 2024: $39.15 million) influenced by higher diaspora remittances.

On the other hand, debt service payments declined by 2.3 per cent y/y to $276.73 million (February 2024: $283.22 million), while payments for letters of credit dropped by 6.8 per cent y/y to $95.59 million (February 2024: $102.60 million), partly reflecting lower imports amid weaker consumer demand.

On a month-on-month (m/m) basis, international payments facilitated by CBN declined by 24.5 per cent relative to the $630.64 million recorded in January.

Reacting to the reported figure, analysts at Cordros Research noted that they expect international payments to remain elevated, primarily due to FG’s debt repayment and servicing obligations.

“Additionally, we expect the improvement in foreign exchange liquidity to strengthen consumer demand, leading to a gradual increase in imports of goods and services, which will support the growth in payments of letters of credit and direct remittances,” they said.

Over the long term, consistent remittance inflows positively affect GDP growth by supporting infrastructure investments, human capital development, and commercial activities.

Increased remittance inflows stimulate small and medium-sized enterprises (SMEs) and entrepreneurship in local economies, creating job opportunities and fostering economic expansion.

Thus, the surge in direct remittances would be beneficial for Nigeria’s economy by boosting GDP growth, supporting businesses, and enhancing foreign exchange liquidity. However, maximising their impact requires policies that encourage productive use of remittance funds, such as investments in infrastructure, education, and entrepreneurship, while addressing challenges like brain drain and potential currency appreciation effects.