Nigeria reported a significant improvement in its foreign exchange (FX) position in the first quarter of 2025, with a net FX inflow of $15.2 billion.Â
This milestone marks the impact of the Central Bank of Nigeria’s (CBN) ongoing reforms, which aim to liberalize the foreign exchange (FX) market, restore investor confidence, and enhance overall market liquidity.
According to data unveiled during the Nigerian Investor Forum, held in conjunction with the IMF/World Bank Spring Meetings in Washington, D.C., total foreign exchange (FX) inflows into Nigeria increased to $28.92 billion in Q1 2025. During the same period, FX outflows stood at $13.72 billion, resulting in a strong net inflow that demonstrates growing market confidence among investors and the Nigerian diaspora.
This represents a notable year-on-year improvement compared to the first quarter of 2024, signaling increased investor activity and broader acceptance of the country’s foreign exchange policies.
Year-on-Year Growth and Reform-Driven Momentum
When compared with Q1 2024, FX inflows surged by 18.68%, increasing from $24.37 billion to $28.92 billion. At the same time, FX outflows increased by 32.72% from $10.34 billion to $13.72 billion, largely due to the increased access to the FX market under a more liberalized policy environment. Despite the rise in outflows, Nigeria’s net FX position remains firmly positive, illustrating that the country can now meet foreign exchange demand more effectively and without excessive intervention from the central bank.
The CBN confirmed that its direct market participation has declined significantly, now accounting for only 2% of total foreign exchange (FX) turnover. This marks a departure from the previous approach, where the apex bank was the dominant market supplier, underscoring the maturing nature of Nigeria’s foreign exchange (FX) ecosystem.
Monthly Breakdown Reflects Resilience
An analysis of monthly foreign exchange (FX) trends in Q1 2025 reveals a dynamic yet resilient market. In January 2025, Nigeria recorded inflows of $9.41 billion and outflows of $4.84 billion, resulting in a net foreign exchange (FX) inflow of $ 4.57 billion. February proved to be the strongest month, with inflows peaking at $10.64 billion and outflows dropping to $3.72 billion, resulting in a robust net inflow of $6.92 billion.
However, March showed a slight pullback. FX inflows dipped to $8.88 billion while outflows rose to $5.16 billion, leaving a net inflow of $3.72 billion. Despite this moderation, the March performance still reflects a healthy and responsive FX market capable of adjusting to seasonal trade demands and global financial pressures.
Sustained Reforms Drive Long-Term Growth
The improvement in Q1 2025 builds on the momentum from 2024, during which Nigeria recorded a total foreign exchange (FX) inflow of $99.4 billion—a 44% increase from the previous year. The CBN credits this growth to reforms such as the unification of the naira exchange rate and the elimination of FX demand backlogs.
These policies have helped diversify sources of liquidity and foster a more transparent and efficient spot market. The average monthly foreign exchange (FX) turnover rose to $8.1 billion in Q1 2025, compared to $5.5 billion in the previous year—an indicator of increased market participation and restored investor confidence.
With net FX flows growing by 58% in 2024 and continuing to show strength in 2025, Nigeria appears to be on a path toward a more sustainable and investor-friendly foreign exchange environment. If current reforms are maintained and further strengthened, the country could see continued improvements in external sector stability and macroeconomic performance.
