Macroeconomic Report & Economic Updates

According to the Central Bank of Nigeria, Nigeria recorded a lower balance of payments surplus of US$2.67 billion in the fourth quarter of 2025, compared with US$4.60 billion in the third quarter, indicating a moderation in external sector performance during the period. The current account balance also declined sharply to US$1.40 billion from US$4.06 billion in the Q3 2025, largely as a result of a weaker goods account balance, lower crude oil and refined petroleum exports, higher non-oil imports, and increased net outflows in the primary income account. The goods account balance fell to US$1.77 billion from US$4.53 billion, as crude oil exports declined to US$6.77 billion while non-oil imports rose to US$8.77 billion. At the same time, the secondary income account improved to US$6.21 billion, supported by an increase in workers’ remittances to US$5.72 billion, while the financial account recorded higher net borrowing of US$1.96 billion, driven mainly by increased portfolio investment liabilities of US$5.27 billion. Despite the weaker current account position, external reserves increased to US$45.75 billion at the end of December 2025, up from US$42.77 billion at the end of September 2025. Overall, the fourth quarter outcome highlights the continued vulnerability of the Nigerian economy to export volatility and rising import pressures. It also underscores the need to strengthen non-oil export performance, improve the resilience of the external sector, and sustain measures that support reserve accumulation and broader macroeconomic stability.

Nigeria's headline inflation rate over the twelve-month period under review shows
a steady decline in price pressures across the economy. Inflation stood at  27.6°k in January 2025, fluctuated lightly in the early months, and then began a consistent downward trend through the rest of the year. By the end of the final quarter of 2025, inflation  had  fallen to 19.0%  in October,  17.3%  in  November, and 15.1%  in December, before remaining at 15.1°kin January 2026. These changes represent a significant fall in headline inflation rate this year compared to the same period of last year. Overall, the  sustained decline suggests improving price stability in the economy, reflecting  slower  increases  in  the  average  price  level of  goods  and   services 
consumed my households.
 

According to the National Bureau of Statistics’ (NBS) Q4 2025 Foreign Trade in Goods Statistics, Nigeria’s total merchandise trade stood at ₦36,214.34 billion in the fourth quarter of 2025, representing a decline of 1.07% from the ₦36,604.83 billion recorded in the corresponding quarter of 2024 and a decrease of 8.94% from ₦39,771.47 billion in the third quarter of 2025. This decline was driven largely by a fall in crude oil exports. Despite the decline in overall trade, the merchandise trade balance remained positive at ₦1,712.48 billion, indicating continued resilience in the external sector.During the quarter under review, total exports were valued at ₦18,963.41 billion, accounting for 52.36% of total merchandise trade, while imports amounted to ₦17,250.93 billion, representing 47.64% of total trade. Imports also increased by 3.98% from ₦16,590.51 billion in the fourth quarter of 2024 and by 1.73% from ₦16,957.90 billion in the third quarter of 2025. Crude oil remained the dominant export commodity, valued at ₦9,702.87 billion, and accounting for 51.17% of total exports. While the positive trade balance suggests some degree of external-sector strength, the decline in total merchandise trade underscores the economy’s continued vulnerability to fluctuations in global oil prices and domestic production levels. Moreover, the rise in imports alongside declining exports points to increasing demand for foreign goods relative to domestic output, a trend that could place further pressure on the trade balance over time. In light of these factors, policy should focus on strengthening non-oil export performance through improved domestic production capacity, higher competitiveness, and greater value addition. At the same time, efforts to support local industries and reduce import dependence will be essential for improving trade sustainability and strengthening the resilience of the economy.

According to the OPEC Monthly Oil Market report for March 2026, Nigeria’s crude oil production averaged 1.314 million barrels per day (mbpd) in February 2026, down from 1.459 mbpd in January and below its OPEC quota of 1.5 mbpd. This marks the seventh consecutive month since August 2025 that the country has failed to meet its assigned quota. The shortfall reflects persistent operational challenges in the oil sector, including security concerns, pipeline vandalism, oil theft, and  infrastructural constraints that limit production capacity. As Nigeria’s budget and foreign exchange inflows remain heavily  dependent on oil earnings, continued underperformance reduces export volumes and potential revenue, particularly during  periods of favourable global oil prices. Addressing this trend requires strengthening security in oil-producing regions,  increasing investment in upstream infrastructure, and improving regulatory efficiency to attract greater investor participation.

Data from the Nigerian Foreign Exchange Market (NFEM) published by the Central Bank of Nigeria (CBN) shows that the exchange rate averaged ₦1,355.53/US$ in February 2026, representing a 4.49 percent month-on-month appreciation from the average of ₦1,416.52/US$ in January 2026 and a 10.73 percent year-on-year improvement from ₦1,500.97/US$ in February 2025. On 17 February 2026, the exchange rate strengthened to ₦1,335.96/US$, its strongest attained since 29 May 2024 (₦1,197.11/US$). The Monetary Policy Committee (MPC), at its 304th meeting, noted the strong performance of Nigeria’s external sector, with rising export earnings and remittance inflows boosting foreign exchange reserves and supporting stability in the foreign exchange market. To further strengthen the Naira and enhance exchange rate stability, Nigeria should bolster foreign reserves by increasing both oil and non-oil export earnings while reducing import dependence. Enhancing oil receipts requires greater investment in production infrastructure and stronger measures to curb oil theft and pipeline vandalism. Strengthening non-oil receipts requires the implementation of export promotion policies, which should include targeted tax incentives for micro, small, and medium-sized enterprises (MSMEs) and the provision of adequate infrastructure.