Nigeria’s External Position Strengthens as Exports, Remittances Lift Q2 Surplus to $7.54bn

.Cardoso, Oyedele sign MoU to strengthen fiscal, monetary policy coordination, target single-digit inflation

Nume Ekeghe in Lagos and James Emejo in Abuja

Nigeria’s external position strengthened significantly in the second quarter of 2026 as a sharp increase in export earnings, combined with lower crude oil imports, widened the country’s goods surplus and helped the current account surplus to $7.54 billion.

Also, the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, yesterday signed a Memorandum of Understanding (MoU) to prevent government spending, borrowing and liquidity management from working at cross-purposes in the fight against inflation.

The agreement, which was signed by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, and CBN Governor, Mr. Olayemi Cardoso, at the apex bank headquarters in Abuja, institutionalised regular consultation, data-sharing and coordinated policy assessments between the two institutions.

The CBN in its Q2 2026 Balance of Payments (BOP) Highlights, stated that “provisional balance of payments (BOP) statistics for Q2 2026 shows a current account surplus of $7.54 billion,” up from $4.49 billion in the preceding quarter and $5.17 billion in the corresponding period of 2025.

The latest surplus represented a 67.93 per cent increase from Q1 2026, underscoring the stronger flow of foreign exchange into the economy during the quarter.

At the heart of the improvement was the goods account, which the CBN stated, “recorded a higher surplus of $10.12 billion in Q2 2026, as against $5.96 billion and $4.85 billion recorded in the preceding quarter and corresponding period of 2025, respectively.”

The central bank attributed the stronger goods position principally to the substantial increase in exports.

It added, “A substantial rise in exports to $20.08 billion in Q2 2026, from $15.56 billion in Q1 2026, [was] driven by increases in crude oil, natural gas, refined petroleum products, and non-oil exports.”

Crude oil remained the biggest source of export earnings, although the quarter also recorded strong growth across other major export categories.

According to the report, “Crude oil exports increased by 15.78 percent to $9.39 billion,” while “Gas exports rose by 40.15 percent to $3.63 billion.”

The performance of refined petroleum products was even stronger.

The CBN reported that “Exports of refined petroleum products increased by 66.24 per cent to $3.94 billion,” while “Non-oil exports increased by 25.30 percent to $3.12 billion.”

Taken together, crude oil, gas and refined petroleum products generated $16.96 billion in the quarter, compared with $13.07 billion in Q1. Non-oil and electricity exports contributed a further $3.12 billion.

The export improvement was complemented by a sharp reduction in crude oil imports.

The report states, “A decline in crude oil imports from $1.39 billion in Q1 2026 to $0.58 billion in Q2 2026” was another factor behind the higher goods balance.

The CBN data show that total goods exports increased by 29.05 per cent quarter-on-quarter, while goods imports rose only marginally by 3.75 per cent to $9.96 billion. Within this, refined petroleum product imports increased to $660 million from $360 million, while non-oil imports rose to $8.73 billion from $7.85 billion.

Beyond merchandise trade, the balance of payments report showed a mixed picture across the other components of the current account.

The services account remained a significant source of pressure, with the CBN reporting that “net outpayments in the services account increased to $4.67 billion in Q2 2026, from $3.71 billion in Q1 2026.”

It explained that “the increase was largely due to increases in net debit for transport, travel, insurance, other business, and government services not included elsewhere.”

The primary income account also deteriorated during the quarter.

The report further stated, “The debit balance in the primary income account increased significantly to $4.20 billion in Q2 2026, from $3.23 billion in Q1 2026.”

The CBN attributed this largely to “increase in out-payments as dividend and interest to non-residents’ investors.”

However, stronger remittance inflows provided an important counterweight.

The central bank said “The secondary income account balance increased to $6.30 billion in Q2 2026, from $5.47 billion in the preceding quarter.”

It further noted that “personal transfers (workers’ remittance) from Nigerians in diaspora, which is a major component of this sub-account, increased by 9.81 per cent to $5.82 billion in Q2 2026.”

The improvement extended into the financial account, which recorded a notable turnaround during the quarter.

According to the CBN, “financial account recorded a net lending position of $1.74 billion in Q2 2026, as against a net borrowing of $2.03 billion in Q1, 2026.”

Portfolio investment liabilities generated $7.09 billion in inflows, compared with $6.03 billion in Q1, while direct investment liabilities rose to $1.15 billion from $1.03 billion.

The report also recorded a substantial increase in other investment outflows, with other investment assets reaching $7.96 billion, compared with $3.54 billion in Q1, while other investment liabilities rose to $2.75 billion from $1.36 billion.

Ultimately, the stronger external flows translated into an improvement in Nigeria’s reserve position.

The CBN reported that “Nigeria’s overall balance of payments for Q2 2026 resulted in a higher surplus of $3.51 billion,” while “the stock of External Reserve increased significantly to $51.39 billion at end-June 2026, from $48.35 billion at end-March 2026.”

Net errors and omissions, meanwhile, narrowed to $5.82 billion, from $6.62 billion in Q1.

Meanwhile, the framework of the MoU signed by Oyedele and Cardoso is expected to produce more consistent assumptions and forecasts on inflation, economic growth, government revenue, liquidity, financing requirements and the external sector, while improving coordination of government cash management and debt issuance.

Significantly, the agreement seeks to strengthen cooperation without compromising the operational independence of the central bank.

Speaking at the signing ceremony in Abuja, Oyedele said the essence of the agreement was to make coordination a feature of institutions rather than a product of the personalities occupying key economic offices.

He said, “Strong economies are not built around strong personalities. They are built around strong institutions.”

According to him, although fiscal and monetary authorities have distinct mandates, their actions ultimately affect the same economy.

He said, “Government borrowing affects liquidity and interest rates. Monetary policy affects the government’s financing costs. Tariffs and exchange rates affect prices and revenue. Spending affects demand. Agricultural policy affects food inflation.”

Oyedele explained that the MoU would make existing institutional linkages more deliberate through stronger information-sharing, common macroeconomic assumptions and mechanisms for resolving areas where fiscal and monetary actions could conflict.

He stressed, however, that coordination would not translate into fiscal control of monetary policy.

According to him, “The operational independence of the Central Bank remains sacrosanct. Coordination must never become fiscal dominance.”

He added that the government was simultaneously strengthening institutions responsible for fiscal governance and accountability, including the Fiscal Responsibility Commission, Bureau of Public Procurement, Nigeria Extractive Industries Transparency Initiative (NEITI), Office of the Auditor-General and the National Bureau of Statistics (NBS).

The minister said the durability of the arrangement would ultimately be tested by whether policy coordination remained effective regardless of changes in the individuals occupying the offices.

However, Cardoso pointed out that the agreement marked a shift from a longstanding but largely relationship-driven collaboration between the Ministry of Finance and the CBN to one anchored in formal processes and predictable institutional engagement.

He said both institutions had worked together for decades on inflation, debt sustainability, budget financing, exchange-rate stability, economic reforms and responses to domestic and international shocks.

The central bank governor said, “What distinguishes today’s event is the formal institutionalisation of that collaboration.”

Cardoso said the new framework would cover government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.

He pointed out that the arrangement was particularly important as the CBN advanced its transition towards an inflation-targeting framework, noting that the effectiveness of such a regime depended not only on monetary policy but also on a supportive fiscal environment.

The central bank governor said closer coordination would strengthen the quality of economic decisions, reduce uncertainty and enable both institutions to respond more effectively to emerging shocks.

The agreement essentially focused on the inflation challenge, which the government said could not be resolved through monetary policy alone.

Cardoso said the significance of the agreement extended beyond the document itself, describing it as an affirmation that complex economic challenges required institutions to work together rather than operate in isolation.

He said stronger collaboration would support macroeconomic stability, enhance investor confidence and create a more resilient foundation for sustainable growth.

The CBN governor also said the framework would provide the basis for an operational mechanism to guide implementation, allowing both institutions to coordinate assessments, share information and minimise policy trade-offs.

Under the arrangement, fiscal authorities are expected to focus on disciplined spending, improved cash and liquidity management, efficient financing, revenue mobilisation and measures to address structural drivers of inflation, while the CBN retains responsibility for monetary and financial-system stability.

The CBN governor said the broader objective was to ensure that the country’s two principal macroeconomic policy engines reinforce rather than undermine one another.

Oyedele, nonetheless, said the administration’s objective was to bring inflation sustainably into single digits, but argued that structural pressures from food, energy, logistics and imported costs required a broader government response.

On agriculture, he listed stronger grain reserves, improved seeds and yields, irrigation, climate resilience and rural roads among measures required to ease food-price pressures.

He also called for greater collaboration with state governments to eliminate unnecessary road levies and improve farm-access infrastructure, which he said contributed to the cost of moving agricultural produce to markets.

On energy, Oyedele maintained that price stability should be pursued without returning to what he described as distortionary consumption subsidies.

He said tax exemptions on fuel and improved foreign-exchange stability had helped moderate pump prices, warning that a return to subsidy could place renewed pressure on public finances and the naira.

Oyedele said the government was working with the NBS to expand the country’s economic information base, including through a Producer Price Index as well as employment and productivity data.

He said better data would enable policymakers to identify price pressures earlier and assess economic performance beyond headline GDP growth.

“We can judge growth by whether it creates real jobs, not just GDP,” he said.

The two institutions will also share fiscal and monetary information more efficiently, including data on government cash positions, financing plans, credit growth and foreign-exchange flows.

The objective is to establish a common evidence base for economic policy decisions.

According to Oyedele, the country recorded a balance-of-payments surplus of more than $5 billion in 2025, while external reserves had risen above $54 billion.

He added that stated that in the third quarter of 2026, non-oil exports outpaced oil exports for the first time, while imports of refined petroleum products declined as domestic refining capacity expanded.

Oyedele said recent developments had also strengthened investor confidence, citing Nigeria’s return to Frontier Market status under FTSE Russell and its planned inclusion in a new frontier local-currency government bond index by JPMorgan.

But he stressed that the government’s ultimate objective went beyond portfolio inflows.

He said, “Capital follows trust before it follows returns,” adding that policy consistency, certainty and clarity remained critical to attracting patient capital for factories, infrastructure, technology and job creation.