The Central Bank of Nigeria (CBN) has reported a 17.2 per cent year-on-year increase in international payments for February 2025, totaling $497.91 million compared to $424.96 million in February 2024.
The rise was driven primarily by a significant increase in direct remittances, which accounted for 25.2 per cent of total international transactions. In contrast, payments for debt servicing and letters of credit declined during the same period.
Direct remittance payments rose sharply by 220.8 per cent year-on-year to $125.58 million, up from $39.15 million in February 2024, reflecting stronger inflows from the Nigerian diaspora.
Meanwhile, debt service payments dropped by 2.3 per cent to $276.73 million, and payments for letters of credit decreased by 6.8 per cent to $95.59 million. Analysts attributed the decline in letter of credit payments to lower import volumes amid weakened consumer demand.
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On a month-on-month basis, international payments fell by 24.5 per cent from $630.64 million recorded in January 2025.
Analysts at Cordros Research noted that international payments are likely to remain elevated in the coming months due to the federal government's ongoing debt servicing commitments. They also pointed to improved foreign exchange liquidity as a factor that could revive consumer demand and gradually boost imports—particularly through increased use of letters of credit and direct remittance transactions.
"Over the long term, remittance inflows play a critical role in economic development by supporting infrastructure, human capital, and entrepreneurship," the analysts said.
Sustained growth in diaspora remittances is expected to benefit small and medium-sized enterprises (SMEs) by creating new opportunities, supporting local businesses, and improving access to foreign exchange. However, experts emphasize the need for strategic policies that channel remittance inflows into productive sectors such as education, infrastructure, and small business development to maximize their impact on Nigeria's economy.
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