By Benson Daniel
Nigeria’s total foreign exchange utilisation rose sharply to $50.93 billion in 2025, marking the highest annual level recorded in six years as demand from businesses, importers and other economic sectors increased significantly.
The figure represents a 91.1 per cent increase from the $26.65 billion recorded in 2024, highlighting the substantial expansion in foreign currency transactions across the economy.
Data from the Central Bank of Nigeria showed that foreign exchange utilisation increased throughout much of 2025, with total quarterly utilisation reaching $12.71 billion in the first quarter, $13.13 billion in the second quarter, $12.01 billion in the third quarter and $13.08 billion in the final quarter.
The sharp increase was driven largely by rising demand for foreign currency for invisible transactions, which include financial services, business services and other payments that do not involve the direct importation of physical goods.
Invisible transactions accounted for $30.99 billion of total FX utilisation during the year, compared with $11.11 billion in 2024. Financial services alone accounted for $20.30 billion, almost twice the $10.76 billion recorded a year earlier.
Business services also recorded a substantial increase, rising to about $5.45 billion from approximately $702 million in 2024.
Foreign exchange utilisation for merchandise imports also increased, although at a much slower pace. Import related utilisation rose to $19.94 billion in 2025 from $15.54 billion the previous year.
The industrial sector remained the largest user of import related foreign exchange, accounting for about $8.60 billion during the year. Manufactured products followed with $2.69 billion, while food products accounted for $2.36 billion.
The oil sector also recorded a significant increase in its foreign exchange utilisation, rising to $4.73 billion from $2.26 billion in 2024.
Other sectors recorded smaller increases. Transport related FX utilisation rose to $677.51 million, while agriculture increased to $208.87 million during the year.
The surge in FX utilisation comes against the backdrop of major changes in Nigeria’s foreign exchange market, following reforms introduced by the Central Bank of Nigeria to improve transparency, reduce distortions and strengthen liquidity.
While the increase in utilisation points to stronger activity within the formal foreign exchange market, it also reflects the continued importance of foreign currency to Nigerian businesses, particularly companies dependent on imported raw materials, equipment, services and other inputs.
The rise in invisible transactions is particularly significant as it indicates that demand for foreign currency is no longer being driven solely by merchandise imports. Financial and business services have become increasingly important components of Nigeria’s overall foreign exchange requirements.
The development also comes as the naira market has shown greater stability compared with the severe volatility experienced after the major foreign exchange reforms of 2023 and 2024.
With foreign exchange reserves strengthening and inflows from oil earnings, remittances and other sources improving, the increased utilisation could provide a clearer picture of the scale of legitimate dollar demand within the economy.
However, the figures also underline the need for sustained efforts to increase domestic production and reduce excessive dependence on imported goods and services.
For policymakers, the challenge will be to maintain adequate foreign exchange liquidity while ensuring that increased dollar demand is supported by stronger exports, investment inflows and domestic productive capacity.
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