Nigeria’s FX demand hits $18.34bn as services surge

Nigeria’s foreign exchange utilisation surged to $18.34bn in the second quarter of 2026, its highest level in nearly 15 years, as financial services transactions accounted for more than half of total demand, according to the Financial Markets Dealers Association.

The sector absorbed $9.64bn during the quarter, representing 52.58 per cent of total FX utilisation, as demand for cross-border financial transactions rose sharply despite declining expenditure on some categories of imports.

The FMDA’s Q2 FX market report, based on data from the Central Bank of Nigeria, showed that total utilisation increased by 12.84 per cent from $16.25bn in the first quarter and 52.42 per cent from $12.03bn in the corresponding period of 2025.

The figures point to a growing concentration of FX demand in services and financial transactions, rather than merchandise imports alone.

Invisible transactions, which cover payments for services and other non-merchandise items, accounted for $13.24bn, or 72.19 per cent of total FX utilisation in Q2.

This represented a 93.16 per cent increase from $6.85bn recorded in the corresponding period of 2025.

Financial services accounted for most of the increase, with demand rising 72.81 per cent from $5.58bn a year earlier.

Business services demand climbed 191.39 per cent to $1.66bn from $570.41m, while other services increased 118.66 per cent to $1.12bn.

The report did not provide a detailed breakdown of the financial services transactions. It is therefore unclear how much of the demand represented investment-related payments, financial obligations or other cross-border transactions.

The figures also showed that import-related FX utilisation declined 1.49 per cent to $5.10bn.

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Industrial imports fell 22.67 per cent to $1.86bn, while oil imports dropped 9.75 per cent to $1.25bn. In contrast, demand for manufactured products rose 77.73 per cent to $982.09m.

The report identified $542.56m in unallocated invisible demand, reflecting a discrepancy between the June figures and the reported aggregate.

On the supply side, autonomous FX inflows strengthened their dominance, providing $23.31bn, or 74.15 per cent of total inflows during the quarter.

The amount represented the highest level since Q1 of 2020, while autonomous sources accounted for a larger share of supply than in both the preceding quarter and the corresponding period of 2025.

Their share rose from 68.48 per cent in Q1 of 2026 to 63.64 per cent in Q2 of 2025.

Total FX inflows, however, declined 2.96 per cent quarter-on-quarter to $31.43bn, although they remained 14.04 per cent above the level recorded a year earlier.

CBN-sourced inflows fell 20.44 per cent to $8.12bn, while the central bank’s direct FX sales to the market dropped 66.73 per cent to $418.08m from $1.26bn in Q1.

Compared with the $3.17bn recorded in Q2 of 2025, CBN sales were down 86.79 per cent.

The association also reported that the central bank sold $1.67bn in FX during the first half of 2026, the lowest half-year amount since its records began in 2008.

Despite the decline in total inflows, Nigeria recorded net FX flows of $22.50bn in Q2, the highest level since the fourth quarter of 2019.