Nigeria’s current account surplus is projected to decline by 31.4 percent to $11.8 billion, down from $17.2 billion in 2024, according to projections by Afrinvest West Africa.
The firm attributed the projected $5.4 billion reduction to weakening domestic crude oil production, declining global oil prices and anticipated lower remittance inflows driven by economic slowdowns in key diaspora economies.
Afrinvest noted that crude oil and condensate production declined from 1.74 million barrels per day (mbpd) in January to 1.66 mbpd in May 2025, while global oil prices dropped from $79.99 per barrel to $67.61 per barrel within the same period.
The development is expected to weigh heavily on Nigeria’s external earnings.
Despite Nigeria posting a current account surplus for ten consecutive quarters, the weakening oil fundamentals and structural economic constraints have created a bearish outlook for the full year.
“While we have flagged weaker average crude oil & condensates production and falling global crude prices as key headwinds, the size of the secondary income component ($5.3bn – equivalent to 1.3x the net merchandise balance) suggests it will also be a critical swing factor for the year-end CA outcome,” Afrinvest stated in its mid-year outlook.
Data from the Central Bank of Nigeria (CBN) showed that the country recorded a $3.7 billion current account surplus in Q1 2025, up 1.1 percent year-on-year but down 1.8 percent quarter-on-quarter.
However, with rising uncertainty around oil output and global macroeconomic conditions, analysts expect that figure to soften in subsequent quarters.
The current account reflects the net value of a country’s trade in goods, services, investment income, and transfer payments, including remittances.
A surplus implies that inflows exceed outflows and typically supports foreign exchange reserves and currency appreciation.
Remittances, which contributed significantly to the current account in 2024 with inflows above $20 billion, are expected to weaken in 2025.
Analysts cite slowing growth in major remittance-source countries such as the United States, the United Kingdom, and Canada as a major downside risk.
Samuel Oyekanmi, Research and Insights Lead at Norrenberger Financial Group, said while remittance inflows may taper, trade data from Q1 indicate that overall export receipts—including both oil and non-oil components—could help cushion the impact.
“On the other hand, the positive sentiments around the equities market are expected to attract foreign portfolio inflows, which would serve as a positive net on the current account,” he stated.
Analysts at CardinalStone Research forecast a slight moderation in Nigeria’s current account surplus this year, noting that oil price weakness will likely offset marginal improvements in production, though they expect some relief in the medium term.
“Exports are expected to improve significantly once the Dangote Refinery secures consistent crude feedstock from the government and ramps up exports of refined products,” CardinalStone noted.
In addition, reduced import demand—driven by companies sourcing inputs locally to mitigate currency risks—is expected to ease pressure on the naira and support external balances.
“Overall, we expect CA to settle at 8.0 percent of GDP in 2025, slightly lower than last year’s level of 9.2 percent,” CardinalStone added.
The projected decline in the current account may weigh on Nigeria’s external reserves position and currency outlook, particularly if the downside risks around crude production and remittance flows materialize.
Policymakers are expected to monitor the trend closely as they adjust fiscal and monetary responses in the second half of the year.
