Nigeria’s economic activity strengthens in December as PMI rises to 57.6

…Balance of payment rises

Nigeria’s domestic economic activity strengthened further in December 2025, with the Composite Purchasing Managers’ Index (PMI) climbing to 57.6 points, according to the Central Bank of Nigeria (CBN). The reading, which was well above the 50-point expansion threshold, reflected the strongest momentum recorded in about five years.

The CBN said the sustained improvement was driven by continued expansion across major employment-generating sectors. Agriculture recorded 58.5 points, industry posted 57.0 points, while services remained in positive territory at 51.9 points, signalling broad-based growth in output and business activity.

Of the 36 subsectors surveyed, 32 reported expansions in key indicators such as production, new orders and employment, pointing to a steady rebound in domestic demand and stronger non-oil activity.

The bank attributed the gains to ongoing macroeconomic stabilisation measures and reforms in Nigeria aimed at improving the business environment and investor confidence. These, it said, continued to support job creation, production efficiency and optimism heading into the fourth quarter of 2025. The December PMI reading, it added, reinforced expectations of a stable growth outlook as the country enters the new year.

Balance of payments swings to $4.6bn surplus in Q3

Nigeria also recorded an overall balance of payments (BOP) surplus of $4.60 billion in the third quarter (Q3) of 2025, reversing the deficit posted in the previous quarter, the CBN reported. The improvement was driven by a sustained current account surplus of $3.42 billion on the back of stronger trade performance, resilient remittances, increased financial inflows and continued accretion to external reserves.

The goods account remained in surplus at $4.94 billion, reflecting higher export earnings. Crude oil exports rose to $8.45 billion, while refined petroleum product exports jumped 44 per cent to $2.29 billion, signalling progress in domestic refining and Nigeria’s gradual shift toward becoming a net exporter of refined products. Total goods exports stood at $15.24 billion, while imports of refined products declined by 12.7 per cent.

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Workers’ remittances also stayed strong, with the secondary income account posting a $5.50 billion surplus, including $5.24 billion from Nigerians in the diaspora.

In the financial account, Nigeria recorded a net lending position of $0.32 billion. Foreign direct investment inflows increased to $0.72 billion, while portfolio inflows rose to $2.51 billion, reflecting firmer investor confidence and active participation in domestic financial markets.

External reserves climbed to $42.77 billion at the end of September 2025, up from $37.81 billion at the end of June, strengthening the country’s external buffers.

According to the CBN, the Q3 2025 BOP outcome highlights improving external sector fundamentals, rising investor confidence and the impact of reforms in the foreign exchange market, monetary policy and the domestic energy sector.

external reserves are expected to climb to $51.04 billion in 2026 on the back of easing foreign exchange (FX) pressures, firmer oil receipts and resilient inflows from remittances and foreign investments, according to the Central Bank of Nigeria (CBN).

External reserves to rise in 2026

In its 2026 Macroeconomic Outlook for Nigeria released on Tuesday, the CBN estimated that external reserves would climb to $51.04 billion in 2026 on the back of easing foreign exchange (FX) pressures, firmer oil receipts and resilient inflows from remittances and foreign investments, Economy Post earlier reported.

This compares with an estimated reserve level of $45.01 billion in 2025.

The apex bank said the anticipated improvement would be driven largely by reduced strain in the FX market, supported by higher oil earnings, sovereign bond issuances and steady diaspora remittance inflows. It added that the ongoing expansion of the Dangote Refinery’s nameplate capacity- from 650,000 barrels per day in 2025 to 700,000 barrels per day, and ultimately 1.4 million barrels per day in the medium term – would further strengthen reserve accretion by reducing fuel import dependence.

The CBN noted that recent reforms in the FX market could deepen transparency and efficiency, narrow the gap between the Nigerian Foreign Exchange Market (NFEM) and Bureau de Change (BDC) rates, while supporting exchange rate stability. Improved domestic refining capacity is also projected to significantly cut FX demand for petroleum imports, further easing pressure on reserves.