REMITTANCE inflows to Nigeria weakened in the first quarter of 2026, with personal transfers from Nigerians in the diaspora dropping to US$5.30 billion from US$5.72 billion in the fourth quarter of 2025, according to the Central Bank of Nigeria’s latest Balance of Payments report.

The decline highlights persistent foreign exchange leakages that continue to undermine the external sector. The CBN noted that leakages in the FX market have disrupted formal channels, pushing more remittances outside regulated routes and reducing the amounts captured in official statistics.

This trend adds pressure on dollar supply at a time when remittances remain one of the country’s most critical sources of foreign exchange earnings.

According to the report, the drop in diaspora remittances and rising service outflows suggest that foreign exchange leakages could erode some of the gains. Additionally, direct investment inflows moderated, while net borrowing increased, indicating lingering concerns among foreign investors about the investment climate.

Despite the setback in diaspora transfers, Nigeria recorded a remarkable improvement in its overall external sector performance.

The current account surplus expanded by 255.7 per cent quarter-on-quarter to US$4.98 billion in Q1 2026, up significantly from US$1.40 billion in the preceding quarter.

The robust performance was primarily driven by stronger export earnings from the hydrocarbon sector and a sharp reduction in petroleum product imports.

Crude oil export earnings rose to US$8.11 billion from US$6.77 billion in Q4 2025.

Exports of natural gas increased to US$2.53 billion from US$2.24 billion, while refined petroleum product exports grew to US$2.37 billion from US$1.97 billion.

At the same time, refined petroleum imports plummeted by 87.5 per cent to just US$0.31 billion, reflecting improved domestic refining capacity and easing demand for foreign exchange.

The goods account surplus widened substantially to US$5.95 billion from US$1.77 billion.

Total exports climbed to US$15.49 billion from US$13.36 billion, while total imports fell to US$9.54 billion from US$11.59 billion, thanks to lower imports of both refined fuel and non-oil goods.

However, the broader current account picture was mixed. Net service outflows widened to US$3.71 billion, fueled by higher spending on travel and business services abroad.

The strengthened external position offers several advantages. External reserves rose to US$48.35 billion in Q1 from US$45.75 billion in Q4 2025, enhancing the CBN’s ability to manage exchange rate volatility and meet external obligations. The developments are also expected to boost investor confidence and support macroeconomic stability.

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