Finance, industry lead dollar flight as Nigeria records $237.51bn net inflows in six years

Nigeria’s financial services and industrial sectors accounted for the largest share of foreign exchange outflows over the past six years, even as the country recorded net inflows of $237.51 billion between 2020 and 2025.

Data obtained from the Central Bank of Nigeria (CBN) showed that Africa’s most populous country attracted total FX inflows of $424.94 billion through the apex bank and autonomous sources during the review period, against outflows of $187.43 billion, resulting in a net inflow of $237.51 billion.

A breakdown of the inflows indicated that autonomous sources accounted for the largest share at $262.07 billion, while the Central Bank of Nigeria contributed $162.87 billion over the six-year period

On the outflow side, $187.43 billion exited the economy, with $155.51 billion routed through the Central Bank and $31.92 billion through autonomous channels.

Despite the positive net position, financial services and industrial activities continued to dominate FX utilisation, particularly for imports and invisibles, which rose to six-year highs of $50.63 billion and $31.73 billion, respectively, within the period under review.

Sectoral utilisation for invisibles climbed sharply in 2025. Data from the CBN showed that FX used for invisibles reached $11.34 billion between January and June 2025, representing an 89.76 per cent increase from $5.98 billion in the corresponding period of 2024. In contrast, FX utilisation for importation rose by a comparatively moderate 40.68 percent to $10.03 billion from $7.13 billion in the same period of 2024.

Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co., attributed the sharp rise largely to the clearance of accumulated FX obligations. He noted that many companies were settling outstanding dividends and foreign currency liabilities over the past year. Olubunmi explained that invisibles typically cover payments for services such as school fees, interest on foreign currency borrowings, dividend remittances to foreign investors, and expatriate transfers.

Ayodeji Ebo, managing director and Chief Business Officer at Optimus by Afrinvest, said the surge in invisibles points to a structural shift in Nigeria’s FX demand profile rather than a temporary spike. He observed that higher payments for education, healthcare, international travel, digital subscriptions and professional services, many of which are recurring and difficult to compress, have significantly increased demand.

According to him, improved transparency and reforms in the FX market by the Central Bank have redirected previously unmet or informal demand into official channels, thereby raising recorded utilisation levels. He added that exchange-rate volatility has encouraged businesses to pre-fund offshore obligations.

By contrast, FX demand for imports has grown at a slower pace, partly reflecting reduced fuel importation following the start of domestic refining operations by the Dangote Refinery.

Overall, analysts say the data highlight the growing weight of services-led FX demand and underscore the importance of expanding FX-earning service exports while strengthening domestic capacity to moderate long-term outflows.

Data from FMDQ Group showed that FX inflows into the Nigerian market opened the year on a stronger footing. Total FX supply rose month-on-month to $3.0 billion, marking the second consecutive monthly recovery since December 2025 and supporting improved liquidity conditions in the market, which helped stabilise the naira and reduce volatility.

The improvement in liquidity was driven largely by robust offshore investor participation, supported by Nigeria’s elevated interest rate environment, which continues to offer attractive yields relative to global peers. Portfolio inflows more than doubled, rising by 151 percent month-on-month to $1.6 billion.

Analysts at Quest Merchant Bank said these inflows were heavily concentrated in the domestic fixed-income market, which absorbed about 98 percent, or roughly $1.5 billion, of total foreign portfolio investments during the month. The equities market attracted a comparatively modest $38.7 million.

A report by the bank noted that FX inflows from other international corporates also improved, rising by 83 percent month-on-month to $155.4 million and further supporting market liquidity.

Foreign direct investment inflows, however, remained subdued, edging up by $2 million month-on-month to $50.3 million, reflecting continued investor caution.

With stronger foreign participation, reliance on Central Bank intervention eased, reducing the need for direct FX support from the monetary authority.