Tuesday, June 10, 2025 - Foreign exchange inflows from domestic sources have reached their highest level in six years, according to a report by the Central Bank of Nigeria (CBN).
The increase reflects a growing confidence in the Nigerian
economy and the impact of recent macroeconomic reforms by the federal
government.
The CBN’s latest report revealed that foreign exchange
inflows into the Nigerian Foreign Exchange Market (NFEM) surged to $5.96
billion in May 2025, representing a 62 per cent increase from $3.67 billion in
April. Of this total, 83.2 per cent, $4.96 billion came from domestic sources,
marking the highest domestic contribution to forex inflows since 2019.
The growth was primarily driven by a sharp rise in
contributions from exporters and importers, which jumped from $655.7 million to
$3.11 billion. Inflows from non-bank corporates also rose from $1 billion to
$1.11 billion, while individual inflows surged from $15.1 million to $91.4
million. Conversely, the CBN’s own contribution fell significantly from $1.35
billion to $649.8 million over the same period.
Foreign sources accounted for 16.8 per cent of total
inflows, rising by 51.7 per cent from $657.4 million to $997.6 million, the
highest level in three months. Inflows from foreign portfolio investors climbed
by 61.3 per cent to $880.8 million, while other foreign corporates contributed
$83.9 million, up 10 per cent. However, foreign direct investments declined
slightly by 6.3 per cent to $32.9 million.
The CBN also released its latest Purchasing Managers’ Index
(PMI) report, which showed continued business expansion. The composite PMI
stood at 52.1 points in May, just below the 52.2 recorded in April. All sectors
remained in expansion territory, with agriculture at 53.4, industry at 51.6,
and services at 51.7.
Analysts at Cordros Capital said the rise in business
activity and forex inflows was due to an improving macroeconomic outlook.
“Looking ahead, we expect sustained expansion in private sector activity,
underpinned by improving macroeconomic fundamentals such as a more stable naira
and moderating inflation. Nonetheless, tight financial conditions remain a
potential headwind to broader economic performance in the near term,” the firm
stated.
President Bola Tinubu’s macroeconomic reforms have drawn
widespread praise from business leaders and international analysts. Africa’s
richest man, Alhaji Aliko Dangote, commended the President’s efforts, saying,
“Your leadership has been both decisive and reassuring. Your actions have
reignited hope for a prosperous Nigeria of today and of the future.”
He highlighted the administration’s removal of fuel
subsidies, unification of the naira exchange rate, and pro-Nigeria industrial
policy as key achievements. “From the very start of the administration, Your
Excellency has worked tirelessly to foster an enabling environment for private
sector-led growth,” Dangote added.
Chairman of BUA Group, Alhaji Abdulsamad Rabiu, also praised
the administration’s performance. “Under your leadership, we have witnessed
real and rapid progress,” he said, pointing to the government’s infrastructure
initiatives and policy reforms.
On the global front, credit rating agencies have noted the
positive impact of Nigeria’s economic reforms. Moody’s Investors Service
recently upgraded Nigeria’s sovereign rating from Caa1 to B3, citing “a more
resilient fiscal position, stronger external accounts, and the government’s
demonstrated commitment to macroeconomic and structural reforms.”
Fitch Ratings followed suit in April 2025, upgrading
Nigeria’s rating from “B-” to “B” and declaring a stable outlook. The agency
credited the administration for improved policy coherence, foreign exchange
liberalisation, and progress toward eliminating fuel subsidies.
“These have improved policy coherence and credibility and
reduced economic distortions and near-term risks to macroeconomic stability,
enhancing resilience in the context of persistent domestic challenges and
heightened external risks,” Fitch said.
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