By FBNQuest Research
A recently released report by the Central Bank of Nigeria (CBN) shows that Nigeria’s current account surplus (CA) decreased in Q4 2024.
The current account saw a net surplus of US$3.8bn, which was lower than the US$5.8bn surplus posted in Q3 2024, but slightly above US$3.7bn in Q4 2023.
On a standardised basis, the current account surplus was equivalent to 7.6% of GDP, compared with 12.4% in Q3 2024 and 4.7% in Q4 2023.
The surplus was driven by strong inflows from current transfers and a positive trade balance, despite persistent deficits on the services and income accounts.
The positive development on the current account was mainly supported by a net surplus of US$6.4bn in the current transfers account, as well as a trade surplus of US$2.6bn.
Merchandise exports totalled US$12.7bn, with crude oil exports accounting for 83.9% or US$10.6bn, while non-oil and electricity exports contributed US$2.0bn.
Imports amounted to US$10.1bn, with non-oil imports accounting for US$7.4bn or a 73.3% share, while oil and gas imports amounted to US$2.7bn.
The healthy surplus of US$6.4bn on the current transfers account was primarily driven by an inflow of US$5.1bn in workers’ remittances. However, inflows US$1.4bn to the general government also contributed.
Conversely, the services account recorded a net deficit of US$3.5bn, highlighting Nigeria’s limited service exports compared with continental peers like Egypt and South Africa, which thrive in tourism and financial services exports.
The income account recorded a net deficit of US$1.8bn, highlighting sustained net outflows of investment income to foreign investors.
The Q4 2024 CA surplus moderated relative to Q3 due to lower trade surpluses and slightly weaker current transfer inflows.
We maintain our expectation for CA surpluses in Q1 and Q2 2025, driven by merchandise trade and resilient remittance inflows
