The Central Bank of Nigeria (CBN) has reported a significant contraction in the nation's external earnings, with the current account surplus for the third quarter of 2025 falling sharply by over 40 percent. The latest Balance of Payments (BoP) statistics reveal mounting pressures from external debt and service payments, even as earnings from crude oil exports improved.
Sharp Decline in External Surplus
According to the provisional data released by the CBN, Nigeria recorded a current account surplus of $3.42 billion between July and September 2025. This figure represents a steep 41.14 per cent decline from the $5.81 billion surplus posted in the second quarter (Q2) of the year. Furthermore, the Q3 2025 surplus was also lower than the $5.78 billion achieved in the same period of 2024, indicating a concerning year-on-year weakening.
The central bank attributed the sustained positive position largely to improved export receipts. Total exports for the quarter rose to $15.24 billion, up from $14.9 billion in Q2. This growth was powered by the oil sector, where a 10.31 per cent increase pushed crude oil export earnings to $8.45 billion. In a promising sign for domestic capacity, exports of refined petroleum products surged by an impressive 44.03 per cent to $2.29 billion.
Contrasting Trends in Exports and Rising Imports
However, the export story was not uniformly positive. Earnings from gas exports fell significantly by 30.21 per cent to $2.31 billion, while non-oil exports also slipped to $2.19 billion from $2.34 billion. On the other side of the ledger, the total value of imports expanded to $10.3 billion from $9.61 billion in the preceding quarter.
A notable bright spot was the 12.7 per cent drop in imports of refined petroleum products to $1.65 billion, underscoring Nigeria's gradual move towards self-sufficiency in fuel production. Despite the higher overall import bill, the goods account remained in a healthy surplus of $4.94 billion.
Inflows from Nigerians abroad continued to provide crucial support. The secondary income account, dominated by diaspora remittances, remained robust at $5.5 billion, though workers' remittances specifically saw a slight dip to $5.24 billion.
Pressure from Services and Investment Income Outflows
The report highlighted areas of significant strain that eroded the surplus. The net services deficit widened to $4.07 billion, driven by increased spending on sectors like:
- Transport and travel
- Insurance and ICT-related services
- Government services abroad
More dramatically, the primary income account deteriorated sharply into a net debit of $2.95 billion, up from $1.25 billion in Q2. The CBN linked this to the repatriation of reinvested earnings by domestic banks on foreign investments, highlighting the ongoing burden of profit and dividend payments on the country's external finances.
On the financial account, Nigeria posted a net lending position of $0.32 billion, a major reversal from the net borrowing of $6.9 billion in Q2. This shift indicates a higher accumulation of external financial assets. While portfolio investment inflows fell to $2.51 billion, Foreign Direct Investment (FDI) inflows rose sharply to $0.72 billion from a meager $0.09 billion in Q2.
Consequently, Nigeria's overall balance of payments for Q3 2025 resulted in a higher surplus of $4.6 billion. The CBN's data paints a picture of an economy benefiting from stronger oil earnings and growing refining capacity, but simultaneously grappling with the weight of its external obligations and increased demand for foreign services.
