By Alex Igbekhe
Nigeria recorded its highest-ever foreign exchange inflow in 2025, as the economy attracted $109.86 billion into its borders—a 13.8 percent increase from the $96.53 billion posted the previous year, according to the Central Bank of Nigeria’s latest annual report.
The apex bank attributed the historic surge largely to autonomous sources, which now account for nearly two-thirds of all FX entering the country. These non-CBN channels—driven by non-oil export proceeds, capital importation, and over-the-counter purchases—rose by 25 percent to $70.54 billion during the review period.
Interestingly, while total inflows climbed to new heights, the central bank’s own direct receipts actually declined by about 2 percent to $39.32 billion, as lower earnings from government debt instruments and swap transactions tempered its contribution.
On the flip side, aggregate outflows also accelerated sharply, rising nearly 28 percent to $49.05 billion, fueled predominantly by increased autonomous-driven exits. Nevertheless, the economy still closed the year with a stronger net inflow of $60.81 billion, up from $58.16 billion in 2024—a sign that the country retained more foreign currency than it lost, despite the higher leakage.
The CBN’s report painted a picture of an economy where private-sector and market-driven flows are increasingly taking the lead, even as the central bank steps back from its traditional role as the primary FX gatekeeper. This shift, analysts suggest, reflects ongoing policy reforms aimed at unifying exchange rates and allowing market forces to play a greater role in price discovery.
Beyond the headline numbers, the report highlighted a digital payments ecosystem in overdrive. Electronic transaction values soared to N3.46 quadrillion—a 26 percent jump—with ATM usage leading the volume charge, growing by nearly 62 percent to 1.66 billion transactions. PoS and USSD channels also recorded double-digit growth, underscoring Nigerians’ deepening shift toward cashless alternatives.
That digital expansion, however, came with a silver lining on the security front. Fraud-related losses plummeted by more than half to N25.85 billion, down from N52.26 billion in 2024. The CBN credited tighter monitoring systems, deeper integration of BVN with NIN, and improved fraud detection protocols for the sharp decline.
Cross-border trade through the Pan-African Payment and Settlement System also gained remarkable traction. Nigerian participants settled $143.40 million worth of transactions on the platform—nearly five times the $29.23 million recorded in 2024—as the system continues to ease currency conversion costs and reduce pressure on foreign reserves across the continent.
With 20 Nigerian banks now active on PAPSS and BVN enrollments climbing to nearly 68 million, the CBN’s 2025 report signals an economy navigating its external challenges with growing resilience—even as the central bank recalibrates its role in the foreign exchange market.
Discussion about this post