Nigeria’s external sector demonstrated significant strength during the second quarter of 2025, with the nation’s current account surplus surging to $5.28 billion. This figure, disclosed by the Central Bank of Nigeria (CBN), represents a substantial increase from the $2.85 billion surplus recorded in the first quarter, reflecting greater economic resilience and an improved outlook for foreign exchange inflows.
This positive movement is mirrored in the country’s gross external reserves, which also witnessed robust growth. By 11th September 2025, the reserves had climbed to $43.05 billion, an accumulation that the CBN highlighted provides the economy with 8.28 months of import cover. This level of growth offers crucial confidence to both domestic citizens and international investors.
The apex bank attributes this favourable performance to a combination of effective policy measures and market dynamics. Key contributing factors include the sustained stability of the Naira’s exchange rate, the implementation of a tighter monetary policy, and a moderation in the prices of petroleum products. Collectively, these elements have led to a more balanced and encouraging outlook for Nigeria’s balance of payments.
Policy Adjustments to Boost Lending
In a move aimed at enhancing liquidity and promoting productive lending across the economy, the CBN’s Monetary Policy Committee (MPC) recently adjusted the Cash Reserve Ratio (CRR) for commercial banks. The CRR was cut from 50 per cent to 45 per cent, allowing banks greater scope for financial intermediation and credit allocation.
Simultaneously, the MPC introduced a stringent 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits. This targeted measure was implemented to sterilise excess liquidity stemming from these public accounts, thereby ensuring such funds do not contribute to inflationary pressure that could undermine the current trend of disinflation. The CBN has provided assurances that, despite this adjustment, account holders retain full access to their funds.
The central bank reiterated its commitment to striking a fine balance between anchoring inflation expectations and actively supporting the real sector of the economy, particularly Micro, Small, and Medium-sized Enterprises (MSMEs). By maintaining systemic stability, financial institutions are better positioned to efficiently allocate surplus funds to segments of the economy in need of capital.
