Nigeria's Foreign Exchange Market Sees Significant Inflow Decrease as Foreign Contributions Drop by 16.5%

The Financial Market Dealers Quotation (FMDQ) has reported that total inflows into Nigeria's exchange market fell by 5.7 percent to $6.67 billion in April 2025, compared to $3.90 billion in March. 

According to its analysis of the United States economy, it also noted a contraction of 0.3 percent in Q1 2025, the first quarterly drop since Q1 2022 (-1.0% q/q).

In its findings, FMDQ attributed the decline of inflows into the Nigerian Foreign Exchange Market (NFEM) to a reduction from foreign sources, which accounted for 17.9 percent of total inflows and decreased by 16.5 percent to $657.40 million, compared to $787.20 million in March. This represents the lowest inflow level for the country in seven months.

Moreover, inflows from other corporates (-40.5%) and Foreign Portfolio Investment (FPI) (-15.7% m/m) segments also showed a decrease, while inflows from Foreign Direct Investment (FDI) (+112.7% m/m) experienced an increase.

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Fluctuations were observed in inflows from local sources (82.1% of total inflows), which fell marginally by 2.9% month-on-month (m/m) to $3.02 billion, down from $3.11 billion in March, driven by drops in inflows from exporters/importers (-23.9% m/m) and non-bank corporates (-23.3% m/m). Conversely, inflows from individuals surged (+125.4% m/m), and the Central Bank of Nigeria (CBN) grew by 43.8 percent.

The report stated, “In the short term, we anticipate that foreign exchange inflows will remain relatively strong compared to last year (2024 monthly average: $2.54 billion), thanks to an enhanced market structure and increased contributions from the CBN.

However, ongoing external pressures, such as global trade tensions and rising uncertainties, may limit inflows from the foreign segment, consequently impacting overall FX liquidity.” 

Additionally, based on information from the domestic and foreign portfolio report, total transactions in the Nigerian equities market soared to an unprecedented high, increasing by 119.0 percent to N1.12 trillion in March, up from N509.47 billion in February.