Business News Update: Nigeria Forex Use Surges 77% as Food Imports Fall, FDI Tumbles in January

BUSINESS NEWS UPDATE

By Ifeyinwa Ike

Nigeria’s total foreign exchange utilisation rose 77% in 2025, climbing to $47.17 billion from $26.65 billion in the previous year, the Central Bank of Nigeria (CBN) reported.

The rise was driven largely by non‑agricultural sectors, particularly manufacturing and industrial production which demanded more forex for equipment, raw materials and expansion projects.

Finance and economic expert Sola Adekanmbi described the trend as a welcome reallocation of foreign currency toward productive activities rather than consumption.

At the same time, Nigeria’s food import bill fell 7.37% to $2.34 billion in 2025 from $2.53 billion in 2024, a development analysts say could signal a gradual reduction in import dependence and a shift toward domestic production despite persistent food security concerns.

Analysts and economists say the twin trends higher forex use in productive sectors and lower food imports point to a structural adjustment that could support longer‑term growth if sustained.

In a separate CBN report, foreign direct investment into Nigeria plunged 80% in January 2026, falling to $30 million from $150 million in December 2025. At the same time, foreign portfolio investment jumped to $3.37 billion from $940 million, driven largely by purchases of bonds and money‑market instruments.

Total capital importation rose to $3.52 billion in January from $1.25 billion the previous month, with portfolio investment accounting for more than 95% of inflows.

The banking sector captured over 75% of foreign capital, while manufacturing received just over 1%, highlighting investors’ current preference for fixed‑income assets over long‑term productive investments.

Internationally, motorists in the United Kingdom have faced rising petrol and diesel prices amid supply disruptions linked to the ongoing conflict involving the United States, Israel and Iran, the BBC reports.

Analysts say the Middle East tensions have disrupted energy production and transport routes, increasing volatility in global oil markets.
Industry group RAC warned that fuel prices could keep rising if the conflict continues.

Observers note that roughly every $10 increase in crude oil typically adds about seven pence per litre at the pump. Since the conflict began, Brent crude has shown sharp swings, pushing UK petrol to 158.5p per litre and diesel to 185.9p per litre on May 19, the highest pump prices seen since Russia’s invasion of Ukraine.