Nigeria’s foreign exchange (FX) market is gaining strength, delivering a net inflow of $15.20 billion in the first quarter of 2025 — a sign that the country’s ongoing market reforms and liberalisation efforts are yielding results.
The figures, presented during the Nigerian Investor Forum on the sidelines of the IMF and World Bank Spring Meetings in Washington, D.C., highlight growing investor confidence, increased diaspora remittances, and improving market liquidity.
In Q1 2025, Nigeria recorded total FX inflows of $28.92 billion, up 18.68% from $24.37 billion in the same period last year.
Outflows also rose, reaching $13.72 billion — a 32.72% jump from $10.34 billion in Q1 2024. While outflows increased due to more liberalised market access, the positive net balance reflects a healthier FX ecosystem capable of withstanding demand pressures.
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The Central Bank of Nigeria (CBN) credited this improved performance to sweeping reforms that have enhanced transparency and deepened market participation.
These reforms have also reduced the CBN’s footprint in the FX space: the bank now contributes just 2% of overall market turnover, a sharp decline from its once-dominant role.
“The strength of Nigeria’s FX position is not just about inflows; it’s about a more dynamic and transparent market that can adjust to shocks without constant intervention,” a CBN official noted during the forum.
A closer look at monthly trends from Q1 2025 reveals a resilient and responsive market:
- January 2025: Inflows hit $9.41 billion, with outflows at $4.84 billion, yielding a net inflow of $4.56 billion.
- February 2025: The quarter’s standout performer, with inflows surging to $10.64 billion and outflows limited to $3.72 billion, resulting in a net inflow of $6.92 billion.
- March 2025: Inflows moderated to $8.88 billion, while outflows rose to $5.16 billion, ending the month with a net inflow of $3.72 billion.
Despite March’s slight dip compared to February’s high, the quarter overall showcased the FX market’s ability to remain buoyant amid external pressures such as global financial shifts and seasonal trade demand.
The robust FX performance is also a testament to the increasing trust from investors and the Nigerian diaspora, both of which are playing a more active role in the formal market. This uptick in participation aligns with government efforts to make Nigeria a more attractive destination for foreign capital.
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In parallel, the average monthly FX turnover rose to $8.1 billion in 2025, compared to $5.5 billion in 2024 — a key indicator of deeper market activity and enhanced liquidity.
With a positive net FX inflow and stronger market fundamentals, Nigeria is better positioned to meet foreign currency demand without placing excessive pressure on the central bank or depleting reserves. The market’s growing maturity also signals to investors that Nigeria is serious about reform and stability.
As the country continues down this path of FX liberalisation, the outlook for sustainable economic growth and investor engagement looks promising — and Q1 2025 could very well be a turning point.
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