By David Akinmola
Nigeria’s foreign exchange (FX) utilisation surged by 91.1 per cent to $50.93 billion in 2025, the highest annual level in six years, as demand for foreign currency by businesses, importers and other economic agents increased sharply.
The latest figure, contained in the Central Bank of Nigeria’s (CBN) 2025 Statistical Bulletin, represents a significant increase from the $26.65 billion recorded in 2024 and marks the strongest annual FX utilisation since 2019.
The sharp increase was driven by higher demand for both import-related transactions and invisible transactions, which include payments for financial, business and other services.
CBN data showed that FX utilisation stood at $12.71 billion in the first quarter of 2025, rising to $13.13 billion in the second quarter before moderating to $12.01 billion in the third quarter. Demand subsequently recovered to $13.08 billion in the final quarter.
The figures indicate that FX demand remained elevated throughout the year, despite quarterly fluctuations in utilisation.
Of the $50.93 billion utilised during the year, invisible transactions accounted for $30.99 billion, significantly above the $11.11 billion recorded in 2024.
Import-related transactions, meanwhile, accounted for $19.94 billion, compared with $15.54 billion in the previous year.
Financial services constituted the largest component of invisible transactions, with FX utilisation rising to $20.30 billion in 2025 from $10.76 billion in 2024.
Business services also recorded a substantial increase, climbing to about $5.45 billion from $702 million, while other services not elsewhere classified rose to approximately $3.51 billion from just $22 million in 2024.
The increase in import-related demand was also broad-based, with the industrial sector accounting for the largest share at $8.60 billion, up from $6.96 billion in 2024.
Manufactured products followed with $2.69 billion, while food products accounted for $2.36 billion. FX utilisation by the oil sector also increased significantly to $4.73 billion from $2.26 billion.
Transport-sector utilisation rose to $677.51 million from $458.58 million, while agricultural-sector demand increased to $208.87 million from $155.96 million.
The sharp rise in FX utilisation occurred against the backdrop of reforms by the CBN aimed at improving the functioning of the foreign exchange market, strengthening transparency and allowing market forces to play a greater role in exchange-rate determination.
The apex bank launched the fourth edition of its Foreign Exchange Manual in May 2026 as part of efforts to build a more transparent and market-driven FX framework.
Despite the significant rise in utilisation, Nigeria recorded stronger aggregate FX inflows during 2025. Total FX inflows increased by 13.81 per cent to $109.86 billion, from $96.53 billion in 2024.
Aggregate FX outflows, however, rose by 27.83 per cent to $49.05 billion, from $38.37 billion, resulting in a net FX inflow of $60.81 billion, compared with $58.16 billion in 2024.
The increase in FX demand therefore comes at a time when Nigeria’s external buffers have also strengthened. External reserves crossed the $54 billion mark in September 2026, reaching $54.08 billion, according to recent CBN data.
For businesses, the sharp increase in FX utilisation points to a significant recovery in formal foreign currency transactions, but also highlights the scale of dollar demand generated by Nigeria’s import requirements and service obligations.
Analysts say sustained growth in FX supply will remain critical to meeting rising demand without creating renewed pressure on the naira, particularly as economic activity and foreign currency requirements expand.
The latest CBN data also suggest that the composition of Nigeria’s FX demand is changing, with invisible transactions now accounting for a larger share of total utilisation than merchandise imports.
The challenge for policymakers, therefore, is to sustain the reforms that have improved market transparency while ensuring adequate and predictable FX liquidity to support legitimate business transactions and economic growth.
