Nigeria’s current account surplus narrows as Dangote Refinery reshapes trade flows

Nigeria’s current account surplus narrowed in 2025 as the ramp-up of operations at the Dangote Refinery altered the country’s trade dynamics, boosting refined product exports while increasing crude imports and reshaping external balances.

Provisional balance of payments data published by the Central Bank of Nigeria (CBN) showed the surplus fell to $14.04 billion in 2025 from $19.03 billion in 2024, though it remained well above the $6.42 billion recorded in 2023.

The shift reflects a transition in Nigeria’s oil trade structure, where the emergence of domestic refining capacity is changing both import and export patterns. Crude oil exports declined by 14.41% to $31.54 billion from $36.85 billion a year earlier, partly due to supply adjustments linked to local refining demand. At the same time, crude imports rose to $3.74 billion, driven largely by purchases by the Dangote Refinery.

Non-oil imports also increased by 13.60% to $29.24 billion, adding pressure to the current account. Together, these factors contributed to the moderation in the overall surplus.

However, the goods account remained resilient, posting a higher surplus of $14.51 billion in 2025 compared with $13.17 billion in 2024. This was supported by increased gas exports and a significant rise in refined petroleum product shipments, with the Dangote Refinery accounting for $5.85 billion in exports.

The availability of locally refined fuel also helped curb Nigeria’s dependence on imported petroleum products, marking a structural shift that analysts say could strengthen the country’s external position over time despite near-term pressures.

Outside the goods balance, rising outflows weighed on the current account. The services deficit widened to $14.58 billion from $13.36 billion, driven by higher payments for transport, travel, insurance and government services. Net outflows in the primary income account surged by 60.88% to $9.09 billion, reflecting increased dividend and interest payments to foreign investors.

The secondary income account, which captures remittances and official transfers, edged lower to $23.20 billion from $24.88 billion, as inflows from both official development assistance and personal transfers declined. Still, diaspora remittances remained a key source of foreign exchange support.

On the financial account, Nigeria recorded a net borrowing position of $1.69 billion in 2025, a reversal from a net lending position of $9.65 billion in the previous year, underscoring softer capital inflows.

Portfolio investment inflows dropped sharply by 48.3% to $8.04 billion from $15.55 billion, reflecting more cautious foreign investor sentiment. In contrast, foreign direct investment inflows rose by 14.1% to $4.01 billion from $1.61 billion, indicating sustained long-term interest in the economy.

At the same time, Nigerian investments abroad increased, with direct and portfolio investment assets recording higher outflows compared with 2024. Other investment flows also weakened, with inflows reversing by $3.08 billion.

Despite the narrower surplus and weaker capital inflows, the overall external position was supported by stronger reserve accumulation, helped by foreign direct investment and increased participation of non-residents in domestic instruments, particularly Central Bank bills.

The evolving role of the Dangote Refinery in Nigeria’s trade structure highlights a broader rebalancing of the economy, where reduced reliance on fuel imports and rising value-added exports could improve external stability over the medium term, even as short-term adjustments continue to weigh on the current account.