Nigeria’s shift toward a diversified, export-driven economy is beginning to yield fruits as shown in the macroeconomic indicators, with the country’s current account balance surging to US$5.28 billion in the second quarter of 2025, its strongest position in years.
This performance, according to an Apex Bank report, represents an increase of more than 85 per cent from US$2.85 billion recorded in the first quarter.
Reports have it that a current account surplus indicates exports are greater than imports, while a deficit means imports exceed exports
The improvement comes at a time of mounting global economic uncertainty, particularly with international oil prices dropping to US$63 per barrel and warnings that Brent crude could dip below US$50 before the end of the year.
Ordinarily, such price volatility would rattle Nigeria’s fiscal structure, but the strengthened current account position illustrates that the economy is gradually developing new buffers outside the volatile oil market.
Experts said at the heart of this transformation is the CBN’s ongoing FX reform agenda, designed to increase transparency, enhance price discovery, and unlock Nigeria’s non-oil export potential.
It would be recalled that Governor Olayemi Cardoso has maintained that the CBN’s new FX strategy is one of the most consequential policy shifts shaping Nigeria’s economic trajectory.
The adoption of a single, market-determined exchange rate, coupled with the deployment of the Electronic Foreign Exchange Management System (EFEMS) powered by Bloomberg’s BMatch technology, has removed much of the opacity that previously plagued the FX market.
Mandatory order submissions, real-time market surveillance, and tighter compliance standards have reduced opportunities for speculation and round-tripping. As a result, the spread between the official and parallel market rates—which once exceeded 60 per cent—has contracted to below two per cent, signalling restored discipline and market confidence.
This transparency-oriented system has also facilitated stronger capital formation. Nigeria attracted US$20.98 billion in foreign inflows in the first 10 months of 2025, a 70 per cent rise compared to all inflows received in 2024 and a remarkable 428 per cent increase over inflows in 2023.
According to Cardoso, the improved FX dynamics demonstrate that the naira is now functioning effectively as a “shock absorber,” helping the economy adjust gradually to global price changes while curbing disruptive volatility.
Alongside the stronger current account position, Nigeria’s external reserves climbed to US$46.7 billion by mid-November 2025, the highest level in nearly seven years.
The reserves now provide more than 10 months of import cover—well above the commonly recommended threshold for emerging markets.
Non-Oil exports to the rescue
Although oil production rose modestly to between 1.45 and 1.52 million barrels per day in 2025, Nigeria’s most encouraging development is the continued expansion of non-oil exports.
Supported by greater exchange-rate flexibility and targeted policy reforms, non-oil exports grew by over 18 per cent year-on-year, reflecting improved competitiveness across sectors such as agriculture, manufacturing, and services.
This shift is crucial, as the country’s longstanding dependence on crude oil is gradually diminishing. Oil now contributes a smaller share to national economic output: it accounts for just 33 per cent of government revenue and 51 per cent of exports, significantly lower than a decade ago.
The renewed export momentum also helped lift Nigeria’s real GDP growth to 4.23 per cent in Q2 2025, the strongest quarterly expansion in four years. Telecommunications, financial services, and improved oil output played important roles, but the broader narrative is one of a diversifying economy where new value chains—especially in the non-oil sector—are beginning to mature.
Nigeria’s reform credibility has been further strengthened by affirmations from leading global rating agencies.
What experts are saying
Founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult), listed major policy shifts yielding positive results for the economy.
He stated that the CBN has eliminated strange arbitraging and round tripping opportunity through the forex market reforms; through petrol subsidy removal, the Federal Government Remove crippling annual waste of US$10.7 billion and created environment for competition; bank recapitalisation is creating stronger and more capable banks to fund US$1 trillion economy while fiscal consolidation is plugging leakages, deploying technology and making government agencies more accountable and expanding fiscal space at sub-national.
Continuing, Adedipe said the real game changer remains the tax reforms, capable of igniting regional competition (the secret behind Chinese economic renaissance) while the Nigerian Education Loan Fund, Consumer Credit Corporation, Recapitalized Bank of Agriculture, National Credit Guarantee Company Ltd, Single digit interest rate mortgage loans are major steps that should be taken to support sustainable economic growth.
Adedipe said that Nigeria’s economy is supported by large, youthful and rapidly growing population (estimated at 237.53 million in July 2025 and sixth largest in the world, median age at 18.1 years).
The country, he said, also benefits from rapid urbanization with 54.28 per cent in December 2023, up from 46.12 per cent in 2013 and 51.96 per cent in 2020, deepening internet penetration which is at 48.15% in April 2025, up from 45.57 per cent in August 2023 and 31.48 per cent in December 2018.
Nigeria’s tele-density at 79.65 per cent in May 2025, from 76.08 per cent in December 2024 and 102.97 per cent in Dec 2023, due to data cleanup at end of April 2024.
“On global internet users, it shows that Nigeria with 123 million ranks 11th and 7th with over 84 per cent on mobile devices. Local oil refining continues to expand and prospects of new refineries, manufacturing is reviving and there is expanding interest in non-oil exports. Improvement in infrastructure will begin to positively impact the cost of doing business,” he said.
He added that sustained deep reforms will enhance global competitiveness and Ease of Doing Business, plug leakages and shrink the space for economic rent.
Fitch upgraded Nigeria’s sovereign rating from B- to B (Stable), citing adherence to orthodox monetary policies, improved FX transparency, and fiscal reforms.
Moody’s upgraded the country from Caa1 to B3, highlighting stronger fundamentals and improved balance-of-payments support.
S&P affirmed its B-/B rating and revised the outlook to Positive, pointing to rising external reserves, deeper fiscal reforms, and stronger macroeconomic resilience.
These upgrades have lowered borrowing costs and attracted new investments. In November, Nigeria secured US$2.35 billion via Eurobond issuance, attracting US$13 billion in bids—the highest order book in the country’s history.
CBN Governor emphasised that monetary reforms alone cannot guarantee sustainable economic stability; they must be complemented by disciplined fiscal policy. One of the most consequential actions by the fiscal authorities has been the elimination of direct deficit financing by the CBN—a practice that previously weakened monetary control and spurred inflation.
In its place, government agencies are now aligning with a new Revenue Optimisation (RevOp) framework, a revamped Treasury Single Account system, and a soon-to-be-launched National Revenue Agency. These reforms aim to reduce leakages, strengthen public financial management, and enhance predictable fiscal operations.
The CBN’s objective is to transition into a full-fledged inflation-targeting regime, where fiscal and monetary authorities work in alignment to sustainably bring inflation down.
Experts say Nigeria’s home-grown advantages provide a favourable backdrop for its diversification efforts. With an estimated population of 237.5 million in 2025—one of the largest and youngest globally—the nation benefits from a growing labour force and expanding consumer market. The median age of 18.1 years positions Nigeria as a potential demographic powerhouse.
Urbanisation continues to accelerate, rising to 54.28 per cent in 2023 from 46.12 per cent in 2013. Internet penetration has followed the same trajectory, hitting 48.15 per cent in 2025, alongside a tele-density of nearly 80 per cent. These trends reflect increased digital activity, growing access to financial services, and deeper integration into the global information economy.