By David Akinmola
Nigeria’s foreign exchange market is witnessing a growing shift towards financial and service-related transactions, with financial services accounting for $9.64 billion, or 52.58 per cent, of total foreign exchange utilisation in the second quarter of 2026, as overall demand climbed to its highest quarterly level in nearly 15 years.
Data from the Financial Markets Dealers Association (FMDA), based on Central Bank of Nigeria (CBN) figures, showed that total foreign exchange utilisation rose to $18.34 billion between April and June, representing a 12.84 per cent increase from $16.25 billion in the first quarter and a 52.42 per cent rise from $12.03 billion in the corresponding period of 2025. <Cite refs={[“turn470828search0″,”turn470828search1”]}/>
The figures highlight the growing importance of cross-border financial payments and other invisible transactions in Nigeria’s demand for foreign currency, even as expenditure on some categories of merchandise imports declined.
Financial services-related utilisation increased by 72.81 per cent year-on-year, from $5.58 billion in the second quarter of 2025 to $9.64 billion in the period under review, making it the single largest component of foreign exchange demand.
Overall, invisible transactions, covering services and financial payments rather than physical merchandise imports, reached $13.24 billion, accounting for 72.19 per cent of total utilisation. The amount represented a 93.16 per cent increase from $6.85 billion recorded in the corresponding period of 2025.
Business services demand also rose sharply by 191.39 per cent to $1.66 billion, while utilisation under other services increased by 118.66 per cent to $1.12 billion.
The increase contrasts with developments in merchandise imports, where foreign exchange utilisation declined by 1.49 per cent to $5.10 billion. Demand for industrial imports fell by 22.67 per cent to $1.86 billion, while oil import-related utilisation dropped by 9.75 per cent to $1.25 billion. However, foreign exchange used for manufactured products rose by 77.73 per cent to $982.09 million. <Cite refs={[“turn470828search2″,”turn470828search3”]}/>
The divergence suggests that Nigeria’s foreign exchange requirements are increasingly shaped by payments beyond conventional merchandise trade. However, the FMDA report did not provide a detailed breakdown of the $9.64 billion attributed to financial services, making it difficult to establish how much went towards investment-related transfers, debt obligations, financial intermediation or other cross-border commitments.
The figures, therefore, do not by themselves establish that the increase represents capital flight or a surge in investment repatriation. The distinction is important for policymakers seeking to understand the sources of dollar demand and identify measures that could improve foreign exchange market stability.
On the supply side, autonomous sources accounted for $23.31 billion, or 74.15 per cent, of total foreign exchange inflows during the second quarter, reflecting the growing contribution of non-CBN channels to the market.
By contrast, direct foreign exchange sales by the CBN fell by 66.73 per cent to $418.08 million from $1.26 billion in the first quarter. The figure was also 86.79 per cent below the $3.17 billion recorded in the second quarter of 2025. Total foreign exchange inflows declined by 2.96 per cent quarter-on-quarter to $31.43 billion, although they remained 14.04 per cent higher year-on-year. <Cite refs={[“turn470828search0″,”turn470828search2”]}/>
The changing composition of foreign exchange demand presents a challenge for policymakers and businesses, particularly where dollar requirements for financial and service-related payments compete with the needs of manufacturers and other productive sectors.
For businesses, the availability and cost of foreign exchange remain critical to import financing, investment planning, debt servicing and the settlement of international obligations. A clearer understanding of the transactions driving demand could help distinguish productive payments from other flows and improve policy responses.
The latest figures also underline the need for greater transparency in foreign exchange data. The FMDA report identified $542.56 million in unallocated invisible demand arising from discrepancies in the June figures, leaving part of the reported utilisation without a clear classification.
As Nigeria continues to manage its foreign exchange market, the central policy question is how to sustain adequate dollar supply while ensuring that financial obligations, productive imports and investment needs can be met without renewed pressure on the naira.
The second-quarter data show that understanding Nigeria’s foreign exchange market now requires looking beyond merchandise imports to the financial and service transactions that account for an increasingly large share of demand.
