Experts Attribute Nigeria’s $3.73 Billion Balance of Payments Surplus to FX Depreciation, Dangote Refinery
Economic experts have linked Nigeria’s $3.73 billion balance of payments (BOP) surplus in the first quarter of 2025 to the depreciation of the naira and the ramp-up of domestic fuel production from the Dangote Refinery.
In its report, the apex bank stated that data from Q1 2025 shows a current account surplus of $3.73 billion, which was lower than the $3.80 billion recorded in the previous quarter.
The data further shows that this is slightly higher than the US$3.69 billion recorded in the corresponding period of 2024.
This comes months after Nigeria reported a surplus of $6.83 billion in 2024.
According to data from the Central Bank of Nigeria (CBN), the goods account balance stood at $4.16 billion in the first quarter of 2025, up from $2.62 billion in the fourth quarter of 2024. Most of these gains came from improved trade performance, with non-oil exports rising by 30.39 percent to $2.66 billion and gas exports increasing from $2.10 billion to $2.66 billion.
At the same time, non-oil imports declined from $7.37 billion to $6.77 billion during the quarter. The secondary income account also maintained a significant surplus of $5.29 billion, according to the CBN.
The stronger goods account position was further supported by a 9.79 percent increase in total exports, which reached $13.91 billion in Q1 2025. Conversely, imports fell to $9.75 billion from $10.05 billion in the previous quarter, largely due to lower imports of petroleum products and other non-oil goods.
On the financial account, the CBN reported a balance of $7.58 billion in Q1 2025, slightly below the $7.82 billion recorded in Q4 2024. This decline was attributed mainly to a sharp reduction in portfolio and other investment liabilities.
The bank explained that significant divestments and the reversal of non-residents’ investments in CBN bills, coupled with substantial external debt servicing and a notable drop in loan liabilities from other depository corporations, were key factors behind the decrease.
What the experts are saying
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf while speaking to Nairametrics stated, “Our largest imports in recent times have been the non-oil. Import is dropping because of exchange rate depreciation. Depreciation of the naira makes import more difficult for importers”, he stated.
“With the full commencement of the Dangote Refinery, a lot of fuel importers are beginning to look inwards.
“For me, the decrease between the last quarter and this in the balance of payment surplus is quite marginal,” he added.
Another expert, Dr. Adam Abudu of the Society for Peacebuilding and Economic Advancement, echoed similar sentiments, stressing that the government needed to do more for domestic investors.
He stressed the need for the government to be consistent with its ‘Nigeria First’ policy.
“We can say one thing and mean another thing. If you have a policy to encourage domestic investors, you should be consistent with it. That’s how it should be,” he said.
“We have Dangote, who built a refinery. This refinery is currently producing large quantities of oil for both domestic consumption and export. Government needs more Dangote Refineries to have a continuous [balance of payment] surplus,” he added.
He also lauded President Bola Tinubu’s administration’s reforms.
“The ongoing reforms are also showing results, given the fact that we have recorded two consecutive quarters of balance of payment surplus.
“We have to sustain the momentum for the next few quarters too,” he added.
External reserves decline
Despite positive results across several key indicators, Nigeria’s external reserves declined to $37.82 billion at the end of March 2025, down from $40.19 billion at the end of December 2024.
In addition, net errors and omissions — a proxy for untracked financial flows — stood at $3.85 billion in the first quarter of 2025, compared to $4.02 billion in the previous quarter.
What this means
The $3.73 billion balance of payments surplus recorded means the country’s total exports are higher than its imports.
According to data from the National Bureau of Statistics (NBS), Nigeria recorded a trade surplus of N5.17 trillion in Q1 2025, an increase of 51.07% from the N3.42 trillion posted in the previous quarter.
The report also noted that total trade for Q1 2025 reached N36.02 trillion, a 6.19 per cent increase compared to the same period in 2024.
The NBS also reported that Nigeria’s petrol import bill fell sharply in the first quarter of 2025, dropping to N1.76 trillion from N3.81 trillion recorded in the corresponding period of 2024.
The decline is largely attributed to increased domestic supply from the Dangote Refinery, which has continued to scale up operations.
Meanwhile, in a related development, the Nigerian Upstream Petroleum Regulatory Authority (NUPRC), in its latest crude oil and condensate production reported that Nigeria’s crude oil production declined to 1,452,941 barrels of oil per day (bpd) in May 2025.
