June 30, 2025/CSL Research
According to data released last week by the Central Bank of Nigeria (CBN), the current account recorded a surplus of US$3.7 billion (2.0% of GDP) in Q1 2025. This represents a slight decline from the US$3.8 billion surplus posted in the previous quarter but reflects a 1% increase compared to the same period last year.
The positive outturn was largely supported by a stronger goods account, as the trade balance expanded by 26.8% year-on-year (y/y) to US$4.16 billion. This improvement was primarily driven by a sharper contraction in imports, which more than offset a modest decline in exports. Goods imports fell by 10.7% y/y to US$9.8 billion, largely due to a 31.3% y/y drop in crude oil imports to US$3.0 billion, an outcome attributed to increased domestic refining activity at the Dangote Refinery.
In contrast, non-oil imports increased by 3.0% y/y to US$6.8 billion. On the export side, earnings declined by 2.0% y/y to US$13.9 billion, mainly driven by a 9.5% y/y fall in crude oil exports to US$11.3 billion, which we connect to the 13% y/y decline in global crude oil prices in the first quarter. However, the overall current account performance was weighed down by continued deficits in the services and primary income accounts. The services account deficit widened by 12.8% y/y to US$3.7 billion, while the primary income account posted a deficit of US$2.0 billion, slightly lower than the US$2.1 billion recorded in Q1 2024. Additionally, the secondary income account saw an 8.2% y/y decline to US$5.3 billion, largely due to a 4.1% drop in remittance inflows to US$4.9 billion.
Given the performance across current account subcomponents in Q1, we maintain our view that the surplus will narrow significantly in 2025, potentially settling at around 2.7% of GDP, down sharply from the 9.2% recorded in 2024. The primary risk to our outlook on the current account remains the trajectory of crude prices. In a downside scenario where crude oil price averages around US$55 per barrel this year; the current account could post a deficit.
Conversely, an upside scenario where oil price averages around US$70 per barrel could add approximately 1-2 percentage points to our baseline forecast for the current account balance. In a separate development, the Debt Management Office (DMO) published Q1 2025 public debt statistics, showing that the total public debt rose by 3.2% quarter-on-quarter (q/q) and 22.8% y/y to ₦149.4 trillion. The quarterly increase was primarily driven by higher domestic borrowings, which grew by 5.9% to ₦78.8 trillion, accounting for about 53% of total debt.
External debt also saw a marginal increase, rising by 0.5% q/q in naira terms to ₦78.8 trillion and by 0.4% q/q in US dollar terms to US$46 billion. We highlight that the minimal difference between naira and dollar growth reflects relative exchange rate stability during the period. Looking ahead, and factoring in expectations of a wider fiscal deficit, we project that total public debt could reach ₦162.2 trillion (approximately 51% of pre-rebased GDP) by year-end.
Click here to download full report: CSL Nigeria Daily – 30 June 2025 – Economy.pdf
