The Petroleum Products Retail Outlets Owners Association of Nigeria has demanded that authorities fully account for an estimated N11.35tn reportedly spent on the rehabilitation of state-owned refineries, warning that continued opacity undermines confidence in the petroleum sector and worsens the country’s energy insecurity.

In its review of Nigeria’s petroleum sector for 2025 and prospects for 2026, signed by the National President, Billy Gillis-Harry, and the spokesman, Joseph Obele, PETROAN said that despite years of heavy public spending on refinery rehabilitation, the facilities have remained largely non-functional or underperforming.

The association stated, “Over the past decade, massive public funds, reportedly around N11.35tn, have been expended on turnaround maintenance and rehabilitation of the four government-owned refineries (Port Harcourt, Warri, and Kaduna), yet the facilities largely remain non-functional or underperforming.”

PETROAN emphasised, “Transparent tracking of funds borrowed and spent must be prioritised. Full forensic audits are essential to restore confidence in public investments. Clear accountability frameworks must be enforced to prevent further waste of public resources.”

It disclosed that approved contracts included “Port Harcourt Refinery: $1.5bn, and “Warri & Kaduna Refineries: Combined $1.48bn,” noting that the scale of expenditure had heightened concerns across the downstream sector.

According to PETROAN, “These significant outlays, coupled with the enduring non-operational status of the refineries, have prompted investigations by security agencies and legislative oversight bodies into allegations of fraud, mismanagement, and lack of accountability.”

The association said transparency must be prioritised, stressing that “Transparent tracking of funds borrowed and spent must be prioritised.” It added that “Full forensic audits are essential to restore confidence in public investments,” while insisting that “Clear accountability frameworks must be enforced to prevent further waste of public resources.”

PETROAN linked the refinery failures to broader downstream challenges in 2025, including supply constraints and increased dependence on imports.

It noted that the Port Harcourt Refinery, Nigeria’s largest state-owned refining complex, “was shut down on May 24, 2025, after a short period of production, following persistent operational challenges, mechanical failures, and the inability to sustain stable commercial production after rehabilitation efforts.”

The association warned that the shutdown has continued to constrain domestic refining capacity, increasing reliance on imported petroleum products and intensifying pressure on foreign exchange demand and pump prices.

It also expressed concern over the social impact of the closure, stating that “Most worrisome is the fact that the refinery shutdown has brought hardship to members of the host communities.”

Beyond refinery challenges, PETROAN said the downstream market was destabilised by intense price competition in 2025. It stated that “the downstream sector experienced intense price competition between petroleum importers and local refiners,” adding that “this price war led to frequent pump price adjustments resulting to loses of billions of naira to our members, market uncertainty, and reduced margins for retail outlet operators.”

While acknowledging short-term consumer relief, the association said “long-term sustainability and investment confidence were negatively affected.”

PETROAN also reviewed the Naira-for-Crude policy introduced to support domestic refining, noting that “approximately 250,000 – 300,000 barrels per day of crude oil were allocated to domestic refineries under this policy.”

It said the initiative “helped ease foreign exchange demand for petroleum importers and supported local refineries with steady crude feedstock,” but added that its effectiveness was limited by operational issues.

The association observed that “Implementation gaps, delays, and inconsistencies in crude allocation affected refinery operations, while pricing disputes and supply constraints also weakened the policy’s impact.

On crude oil production, PETROAN noted a modest recovery in 2025, with output at “Approximately 1.3 – 1.5 million barrels per day, including condensates,” but stressed that production remained below Nigeria’s OPEC quota due to persistent oil theft and pipeline vandalism, aging infrastructure and operational inefficiencies, and limited upstream investment and funding constraints.

The association said “increased crude production is critical for sustaining domestic refining, improving foreign exchange inflows, and ensuring downstream supply stability.”

Looking ahead to 2026, PETROAN said improved product availability was expected but warned that affordability would depend on exchange rate stability, crude supply consistency, and regulatory balance.

The association reiterated its recommendations, including refinery privatisation, transparent crude allocation, continuous stakeholder engagement, and accountability in public investments, stating that these measures were necessary to stabilise the sector.

The Nigerian Exchange Limited recorded a significant increase in value in 2025, with total market capitalisation rising by N36.46tn year-to-date, reflecting sustained investor confidence and renewed interest in equities.

At the beginning of the year, trading on Thursday, 2 January 2025, opened with a market capitalisation of N62.92tn and an All-Share Index of 103,180.14 points. By the end of February, on Friday, 28 February 2025, the market capitalisation had climbed to N67.19tn, while the All-Share Index advanced to 107,821.39 points, underscoring the steady upward momentum in the equities market.

At the close of the latest trading session, the NGX’s total market capitalisation stood at N99.2tn. A total of 1.23bn shares valued at N35.13bn were exchanged in 27,872 deals. Compared with the previous trading day, market activity declined, with trading volume falling by 74 per cent, turnover decreasing by 10 per cent and the number of deals dropping by 20 per cent.

Market breadth closed positive, as 47 equities recorded price appreciation, while 16 stocks ended the session in negative territory out of the 128 listed equities that participated in trading. Aluminium Extrusion Industries led the gainers with a 9.9 per cent increase to close at N21.65 per share. It was followed by Austin Laz and Company, Meyer Plc and C and I Leasing, which gained 9.82 per cent, 9.75 per cent and 9.6 per cent, respectively.

On the losers’ chart, Neimeth International Pharmaceuticals topped the list, shedding 9.38 per cent to close at N5.80 per share. Tantalizers declined by 6.72 per cent, and International Breweries dropped by 4.44 per cent, while NPF Microfinance Bank lost 3.13 per cent.

In terms of trading activity, Chams Plc recorded the highest volume with 710.28m shares exchanged, followed by Zenith Bank with 58.76m shares, Access Holdings with 57.60m shares and FCMB Group with 44.06m shares. On the value chart, Aradel Holdings led transactions with deals worth N9.52bn, followed by Seplat Energy with N7.12bn and Zenith Bank with N3.67bn.

Nigeria produced a total of 443.25 million barrels of crude oil between January and October 2025, according to crude oil and condensate production data from the Nigerian Upstream Petroleum Regulatory Commission.

According to the NUPRC report, this translates to an average of about 1.46 million barrels per day. Despite intermittent improvements, the output level meant that Africa’s largest oil producer remained below its 1.5 million barrels per day crude oil quota set by the Organisation of Petroleum Exporting Countries, achieving about 97 per cent of the quota during the 10-month period.

A breakdown of the figures shows that January recorded the highest crude oil production during the period at 47.70 million barrels, while February was the weakest month at 41.02 million barrels.

Output recovered in March and April and remained relatively strong through May, June, and July before easing in August and September. Crude oil production in October stood at 43.44 million barrels.

In addition to crude oil, Nigeria produced 60.55 million barrels of condensate between January and October. This comprised 17.38 million barrels of blended condensate and 43.17 million barrels of unblended condensate, reflecting the growing role of condensates in supporting overall oil output.

Combined crude oil and condensate production during the period amounted to 503.79 million barrels, equivalent to an average total oil production of about 1.66 million barrels per day.

However, this performance fell short of the Federal Government’s 2025 budget oil production benchmark of over two million barrels per day, which covers both crude oil and condensate.

At an average of 1.66 million barrels per day, Nigeria underperformed the budget target by about 340,000 barrels per day, representing a shortfall of roughly 17 per cent, despite condensate volumes boosting headline production.

Data from the commission show that average daily oil production in October stood at 1.60 million barrels per day, comprising 1.40 million barrels per day of crude oil and about 196,000 barrels per day of condensate. This placed Nigeria’s crude oil output for the month at 93 per cent of its OPEC allocation.

The continued gap between actual production and both OPEC and budget benchmarks has implications for government revenue and foreign exchange earnings, as crude oil exports remain a major source of fiscal funding.

While the Federal Government has pledged to raise oil output through improved security, reduced crude theft, and infrastructure rehabilitation, the January to October figures indicate that structural and operational challenges continue to constrain Nigeria’s oil production, even as condensate output provides some support to overall volumes.

For the 2026 fiscal year, the Federal Government is projecting about N60.97tn in oil revenue, lower than the earnings anticipated in the 2025 budget, reflecting more conservative assumptions on crude oil prices and production.

The projection is based on an analysis and the calculation of data contained in the 2026 Appropriation Bill presented to a joint session of the National Assembly in Abuja by President Bola Tinubu recently.

According to the President, the 2026 revenue estimate is anchored on a benchmark crude oil price of $64.85 per barrel, daily production of 1.84 million barrels, and an average exchange rate of N1,400 to the dollar.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said repeatedly that Nigeria can achieve the production of three million barrels of oil per day in 2025.

“When we came, we barely did a million barrels. Today, we are doing 1.8 mbpd, and we can do more. And those who are responsible for this are more local. And that’s why I’m saying that look, we need to come together and continue on this trajectory. Let’s finish the journey that we have made together. From a million barrels, we have achieved an 80 per cent addition.

“I want to see how we can do 2.5 to three million barrels this year. And we can do it,” Lokpobiri said earlier in the year. However, this has not been achieved as of the time of this report.

Meanwhile, the newly appointed Chief Executive of the Nigerian Upstream Petroleum, Mrs Oritsemeyiwa Eyesan, has pledged to reposition Nigeria’s upstream oil and gas sector, boost investments, and raise oil and gas production.

Eyesan formally assumed office on Tuesday, December 23, 2025, following a handover from the immediate past Chief Executive, Gbenga Komolafe. According to a statement, the new chief executive outlined her vision during her first town hall meeting with management and staff of the commission.

The Central Bank of Nigeria predicts external reserves will climb to $51.04bn in 2026, up from $45bn in 2025.

This projection was contained in the Macroeconomic Outlook for Nigeria, 2026, titled ‘Consolidating Macroeconomic Stability Amid Global Uncertainty’, published by the CBN on Tuesday.

The PUNCH reported that Nigeria’s external reserves as of Monday, 29 December 2025, stood at $45.45bn, following days of steady accretion.

“The external reserves are projected at $51.04bn in 2026, compared with $45.01bn in 2025. The external reserves are expected to be boosted by reduced pressure in the FX market based on the anticipated rise in oil earnings, sovereign bond issuance, and diaspora remittance inflows.

“Additionally, Dangote refinery’s expansion of its nameplate capacity to 700,000 bpd from 650,000 bpd in 2025 and eventually to 1.4 million bpd in the medium term would further support the growth in external reserves,” the report read.

In the FX market, the apex bank noted that reforms are expected to further enhance efficiency and transparency, narrow the premium between the Nigerian Foreign Exchange Market and Bureau de Change rates, and sustain exchange rate stability. In addition, improved domestic oil refining capacity is expected to reduce foreign exchange demand for fuel imports.

On inflation, the CBN anticipates that headline inflation will decelerate further to 12.94 per cent in 2026, driven by a combination of factors, and is expected to come down to 10.75 per cent in 2027.

According to data from the National Bureau of Statistics, inflation has been falling for consecutive months, supported by the base-year effect.

As of November, headline inflation had dropped to 14.45 per cent, relative to the October 2025 headline inflation rate of 16.05 per cent. However, the NBS said the Consumer Price Index rose to 130.5 points in November 2025 from 128.9 points in October, reflecting a 1.6-point increase month-on-month.

The CBN stated, “Inflation is expected to continue its downward trend in 2026. The inflation outlook is predicated on continued stability in the foreign exchange and energy markets, the lagged effect of previous rate hikes, and improved policy coordination. Headline inflation is projected to further decelerate to 12.94 per cent in 2026 from 21.26 per cent estimated for 2025. The anticipated moderation would be driven by declining food and premium motor spirit prices. The expected deceleration in PMS prices would be driven by increasing competition within the midstream segment of the oil industry.

“Furthermore, the anticipated faster decline in food prices is expected to drive the slower pace of inflation. This would be on account of the expected increase in food supply following the launch of various agriculture sector-based policies, improved security in major food-producing regions, and favourable weather conditions.”

The CBN also added that in the transition phase, monetary policy will be flexible to balance price stability and growth objectives. Hence, the Monetary Policy Rate, the Cash Reserve Ratio and other instruments would be adjusted appropriately to manage the growth in money supply and attain a non-accelerating inflation growth path.

On projected monetary conditions in 2026, the CBN said they are expected to be relatively loose in view of the macroeconomic stability observed in 2025, as inflation and exchange rate risks continue to subside.

“In line with its price stability mandate, the Bank will deploy appropriate tools to anchor expectations, foster financial stability, and promote confidence in the economy. The trajectory of monetary aggregates in 2026 is expected to be influenced by external conditions and fiscal operations. Changes in the naira value of foreign currency deposits, arising from exchange rate movements, will continue to influence monetary aggregates. Nevertheless, the Bank’s policy stance, complemented by measures to stabilise the foreign exchange market, is expected to moderate the growth rate of monetary aggregates in 2026,” the bank said.

On the fiscal front, the apex bank noted that the outlook for 2026 is broadly positive, buoyed by sustained improvements in domestic crude oil production and the phased implementation of the Nigeria Tax Act, 2025, which is expected to strengthen non-oil revenue mobilisation.

“However, downside risks persist. A sustained decline in global oil prices below the budget benchmark and an unexpected reduction in oil production could undermine projected oil revenues. Elevated debt service obligations, extra-budgetary spending, and a potential rise in statutory transfers due to pre-election spending could further constrain the fiscal space. The fiscal outlook for 2026 is vulnerable to various risk factors. Notably, a budget risk could crystallise if crude oil prices and domestic production fall below benchmarks, thereby dampening the optimism about oil revenue contribution (57.01 per cent) to the total revenue outcome in 2026.

“Although crude oil production is expected to ramp up in the near term, the domestic oil sector remains sensitive to global shocks. The expectation of a strong non-oil revenue performance in 2026 is hinged on the successful implementation of the Nigeria Tax Act, 2025, and the sustenance of the ongoing tax effort. However, low tax awareness and compliance levels, as well as gaps in tax administration systems, remain significant risks to tax revenue projections,” the bank noted.

In the financial sector, the CBN expressed concerns about rising non-performing loans and their impact on banks, saying, “Rising NPLs pose a direct threat to banks’ profitability, credit availability, and overall risk-bearing capacity. This underscores the need to sustain measures to ensure that worsening NPLs do not weaken banks’ balance sheets, impair asset quality, and trigger systemic contagion. Although recent gains in capital adequacy and liquidity ratios provide a buffer, these indicators remain susceptible to unforeseen macroeconomic shocks.

“An increase in credit losses or foreign exchange illiquidity could erode capital reserves, breach prudential thresholds, and strain liquidity coverage. These conditions could disrupt financial intermediation, diminish market confidence, and amplify vulnerabilities across the banking sector.”

Guaranty Trust Holding Company Plc has secured approvals from the Central Bank of Nigeria and the Securities and Exchange Commission to undertake a private placement of its ordinary shares worth N10bn, the company announced on Tuesday.

The private placement, detailed in a notice filed with the Nigerian Exchange Limited, will involve the allotment of 125 million ordinary shares at N80 per share, with each share having a nominal value of 50 kobo. It is scheduled to close on December 31, 2025, subject to the fulfilment of all regulatory conditions, GTCO said.

“The board has authorised the company to embark on a private placement to raise N10bn by the allotment of 125 million ordinary shares of 50 kobo each,” the company said in a statement signed by Erhi Obebeduo, Group General Counsel.

GTCO explained that the private placement is being undertaken pursuant to Section 7.1 of the Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria.

It follows a shareholders’ resolution passed at the 2024 Annual General Meeting, which authorised the Board to establish a capital raising programme of up to $750m or its equivalent through various instruments and methods, including private placements.

The move comes after GTCO’s banking subsidiary, Guaranty Trust Bank Limited, surpassed the CBN’s new minimum capital requirement for commercial banks with international authorisation, increasing its capital to N504.04bn.

“The professional parties involved will use their respective reasonable endeavours to procure a placee for the private placement shares. The Private Placement is not being underwritten,” the statement added.

GTCO’s Board said the exercise is aimed at strengthening the holding company’s capital base and supporting its ongoing strategic objectives.

The Nigerian Exchange recorded a positive start to trading on Monday, gaining N542bn in market value as investors returned from the holiday break. The market capitalisation of the exchange now stands at N98.4tn, reflecting renewed investor confidence ahead of the year-end.

A total of 1,468,187,076 shares were traded in 47,873 deals, corresponding to a turnover of N35.53bn. Compared with the last trading session on Wednesday, December 24, trading volume declined by 16 per cent, while turnover rose by 22 per cent and the number of deals improved by 147 per cent.

In total, 128 equities participated in trading, with 41 gainers and 37 losers. Ecobank Transnational Inc. led the gainers with a 10 per cent share price increase, closing at N41.80 per share. Austin Laz & Company also rose by 10 per cent, while Eunisell Interlinked gained 9.95 per cent and Honeywell Flour Mill rose by 9.86 per cent. Guinness Nigeria added 9.82 per cent, and Morison Industries rose by 9.81 per cent.

On the losing side, International Energy Insurance recorded the highest decline, falling 10 per cent to close at N2.34 per share. Meyer Plc and E-Tranzact International both shed 9.92 per cent, while Livestock Feeds declined 9.60 per cent. Cileasing and FirstHoldCo also recorded losses of 8.06 per cent and 6.98 per cent, respectively.

In terms of trading volume, Access Bank led with 594 million shares exchanged for a value of N12.36bn. Champion Breweries followed with 122 million shares worth N1.84bn, while FCMB Group traded 116 million shares valued at N1.26bn. Japaul Gold and Ventures recorded 66 million shares traded at N155.25m, and FirstHoldCo traded 51 million shares worth N2.56bn.

Zenith Bank, Champion Breweries, FirstHoldCo, and WAPCO were also among the top value stocks, reflecting strong investor activity in major market players.

Market analysts said the performance reflected a combination of year-end portfolio adjustments by institutional investors and renewed interest in high-performing stocks such as Ecobank, Guinness, and Honeywell Flour Mill.

The market’s gain of N542bn in a single session signals optimism as the year draws to a close, with investors keenly watching for opportunities in blue-chip stocks and high-volume counters.

The Nigerian National Petroleum Company Limited has cancelled subsidy arrears and other debts owed by the Federal Government totalling N4.01tn, following a reconciliation of accounts between both parties, an analysis of official FAAC documents has shown.

The debt write-off formed part of an agreement approving the cancellation of a substantial portion of outstanding liabilities by the government and was detailed in documents submitted by the NNPCL to the Federal Allocation Accounts Committee at its October and November 2025 meetings. Our correspondent obtained the document on Monday.

Recall that The PUNCH exclusively reported on Monday that President Bola Tinubu has approved the cancellation of a substantial portion of the debts owed by the NNPCL to the Federation Account, wiping off about $1.42bn and N5.57tn after a reconciliation of records between both parties.

The report, titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025.”

In the section headed “Recovery from NNPC Ltd Outstanding Obligations,” the commission said the debts earlier reported at the October 2025 FAAC meeting stood at “$1,480,610,652.58 and N6,332,884,316,237.13 for PSC, DSDP, RA & MCA Liftings and JV & PSC Royalty Receivables respectively.”

It disclosed that the Presidency had now approved that most of those balances be removed from the Federation’s books.

A further analysis of the NNPCL document revealed that the amount forgiven by the national oil company represents the difference between NNPCL’s payables to the Federation as at the October 2025 FAAC meeting and the revised figure presented at the November 2025 meeting.

FAAC records showed that NNPCL’s payables to the Federation stood at N4.72tn as at October 2025. However, by the November 2025 FAAC meeting, the outstanding amount had dropped sharply to N706.32bn, implying a cancellation of N4.01tn.

“The NNPC Ltd Payables to Federation amounted to N4,716,488,337,458.65 as at October 2025 FAAC. The NNPC LTD payables to the Federation are N706,317,894,682.09 as at November 2025 FAAC,” the report noted.

The documents, however, indicated that the forgiven sum was lower than earlier subsidy arrears figures, following the wiping off of about $1.42bn and N5.57tn after an extensive reconciliation of records between the Federal Government and the national oil company.

The discrepancy between figures earlier cited by the Nigerian Upstream Petroleum Regulatory Commission and those presented by the Nigerian National Petroleum Company Limited was also clarified in the documents submitted to FAAC.

According to the records, the total equivalent outstanding liabilities in naira stood at N4.72tn, while the grand total outstanding amounted to N6.75tn.

The documents explained that the variation arose largely from how certain legacy obligations were treated. Specifically, outstanding liabilities for the period up to May 2023 relating to royalty, tax, and 40 per cent Production Sharing Contract profit due to the Federation had already been captured under the Presidential Approved Stakeholder Alignment Committee framework.

It further noted that the sum of N2.03tn, covering royalty payments of N1.19tn and tax obligations of N843.28bn for the period from June to December 2023, was excluded from NNPCL’s liabilities and is to be accounted for by the Office of the Accountant-General of the Federation.

“The outstandings for the period up to May 2023 for Royalty, Tax, & 40% PSC Profit due to Federation were included in the Presidential Approved Stakeholder Alignment Committee. The sum of N2,032,479,380,677.87, comprising Royalty of N1,189,200,005,557.13 & Tax of N843,279,375,120.73 from June to Dec 2023, is to be accounted for by OAGF

“The USD was converted based on CBN advised exchange rate of the lifting month,” the report added.

According to the explanation, the difference arose because NNPC maintained that part of the variance should be accounted for by the Office of the Accountant-General of the Federation, rather than the national oil company.

Breakdowns in the FAAC submission showed that total crude oil and gas export receipts and other inflows stood at $23.40m and N3.58bn during the period under review. These inflows formed part of the broader reconciliation of government take and remittances to the Federation Account.

The subsidy debt cancellations come against the backdrop of Nigeria’s long-running fuel subsidy regime, which gulped trillions of naira annually before its removal in mid-2023. For years, NNPC had been the sole importer of petrol, often carrying subsidy costs on its books as under-recoveries owed by the Federal Government.

The latest write-off reflects ongoing efforts to clean up legacy subsidy obligations, improve transparency around oil revenue remittances, and present a clearer financial position for the national oil company, especially as it positions itself for greater commercial credibility and potential capital market transactions.

Despite the reconciliation, concerns remain among experts over the impact of such large debt cancellations on federal revenues and the clarity of inter-agency accounting, particularly between NNPCL, NUPRC, and the Office of the Accountant-General of the Federation.

An analysis of the figures shows that the presidential directive wiped out about 96 per cent of the dollar-denominated debt and about 88 per cent of the naira-denominated obligations previously reported as outstanding.

The document indicates that the approval followed the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which reviewed the company’s royalty and lifting-related liabilities up to December 31, 2024.

Despite the cancellation of the legacy balances, fresh debts built up in 2025 remain. In a separate section titled “NNPC Ltd Outstanding Obligations,” the regulator disclosed that statutory obligations arising between January and October 2025 still stood at “$56,808,752.32 and N1,021,550,672,578.87 for PSC & MCA Liftings and JV Royalty Receivables respectively.”

The commission added that part of the dollar component was recovered in the month under review, stating: “However, the commission received $55,003,997.00 in the month under review from the outstanding, leaving a balance of $1,804,755.32 and N1,021,550,672,578.87. The amount of $55,003,997.00 received is part of the total collection reported above for sharing by the Federation this month.”

The NUPRC confirmed that it had already implemented the directive in the Federation Account, noting that “the Commission has passed the appropriate accounting entries as approved.”

The approval effectively resolves long-running disputes over NNPC’s legacy indebtedness to the Federation, while current liabilities from ongoing operations continue to be tracked for future recovery.

Foreign card usage is returning to Nigeria after years of restrictions, reflecting improved FX liquidity and renewed investor confidence. Recent CBN directives signal a shift from blanket controls to targeted safeguards, highlighting how exchange-rate reforms are reshaping Nigeria’s payments ecosystem, SAMI TUNJI reports

for some years, foreign card usage in Nigeria sat at the crossroads of policy caution and market stress. International transactions on naira debit cards were suspended as the country battled acute foreign-exchange shortages, weak external buffers, and rising arbitrage between official and parallel markets. Businesses and travellers were pushed towards cash, informal channels and offshore cards, while foreign cardholders visiting Nigeria faced limited access to local payment infrastructure.

That backdrop explains why the Central Bank of Nigeria’s latest directive on foreign card transactions is being read not as an isolated compliance update, but as part of a longer arc of reforms that began after the current management of the Central Bank of Nigeria assumed office in September 2023. Since 2023, the CBN has liberalised the FX market, unified exchange rates, and halted monetary financing of fiscal deficits. Clearing of the $7bn FX backlog marked a turning point for investors. Nigeria returned to international capital markets in December 2023, issuing new debt instruments. Ratings agencies responded by upgrading the country’s outlook, while multilateral lenders described the reforms as necessary for sustainability.

The World Bank recently described the measures as “bold interventions” that address structural weaknesses. Nigeria’s sovereign risk spread fell to its lowest point since January 2020, reflecting improved investor sentiment. Portfolio managers have noted the shift. “Nigeria appears to be back in business as long-awaited economic reforms take shape,” said East Capital’s Emre Akcakmak. He highlighted improved liquidity and flexibility in profit repatriation as key factors in renewed interest.

At the heart of the latest directive on foreign card transactions is a requirement for banks and non-bank acquirers to implement multi-factor authentication for such transactions, a step the regulator says is aimed at strengthening security while improving the user experience for international cardholders. The measures are designed to ensure uninterrupted and efficient local currency withdrawals, payments and transfers for users of foreign-issued payment cards across Nigeria, particularly tourists and Nigerians in the diaspora visiting the country. This is a notable shift from an earlier period when the priority was conserving scarce dollars.

The new rules did not emerge in a vacuum. Foreign capital inflows reached $20.98bn in the first 10 months of 2025, representing a 70 per cent increase over total inflows recorded in 2024 and a 428 per cent jump from the $3.9bn recorded in 2023. That improvement in inflows has allowed the CBN to cautiously loosen constraints around card usage, both domestically and abroad, without reopening the door to the kind of speculative pressure that defined earlier years.

It was against this backdrop that Nigerian banks began lifting restrictions on card transactions abroad. Three Tier-1 lenders and a mid-tier bank, United Bank for Africa, FirstBank, GTBank and Wema Bank, announced the resumption of international transactions on their naira debit cards. For customers, the announcements marked the end of an extended moratorium. For regulators, they signalled confidence that FX liquidity had improved enough to support controlled outbound spending.

While customers welcomed the return of international card functionality, the CBN moved to tighten the operating framework around foreign card usage within Nigeria. According to the apex bank, the new framework is designed to improve access to funds, enhance transaction security and boost the overall user experience for foreign cardholders, without compromising financial integrity.

Inside the CBN’s new card rules

The operational details of the policy were outlined in a circular signed by the CBN’s Director of Financial Policy and Regulation, Dr Rita Sike. Financial institutions were instructed to apply multi-factor authentication to all withdrawals and online transactions exceeding $200 per day, $500 per week and $1,000 per month, or their naira equivalents. The same requirements apply across automated teller machines, point-of-sale terminals and virtual payment channels.

The circular states: “In this regard, banks and non-bank acquirers shall implement multi-factor authentication for all withdrawals and online transactions exceeding $200 per day, $500 per week, and $1,000 per month (or their equivalent).” It further directs institutions to ensure compliance with approved cash withdrawal limits for ATM transactions.

Beyond authentication thresholds, the CBN emphasised transparency and settlement discipline. Banks and acquirers were instructed to “clearly communicate the applicable exchange rate, which shall be market-driven and based on the prevailing official rate, as well as other associated charges to users. Transactions should only be completed after the user has accepted the terms (with evidence obtained).”

The regulator also required institutions to maintain sufficient liquidity to settle transactions and to ensure that merchants are settled in local currency. Transaction monitoring systems must be calibrated to detect unusual patterns in the use of foreign cards across all terminals, while know-your-customer and anti-money laundering controls for merchants handling foreign card payments are to be strengthened.

Merchants, in turn, are required to ensure that card-present transaction receipts are properly signed and that valid identity documents are requested where a transaction appears suspicious. Banks and non-bank acquirers were also directed to report suspicious transactions to the Nigeria Financial Intelligence Unit and to recalibrate fraud-monitoring systems to reduce false declines on legitimate transactions.

Taken together, the measures reflect a balancing act. The CBN is reopening channels for foreign cards and international spending, but within a framework that prioritises traceability, system resilience and regulatory oversight. For foreign cardholders, the changes promise broader acceptance and fewer failed transactions. For regulators, they are a safeguard against abuse at a time when confidence in the FX market is still being rebuilt.

Liquidity, confidence and the return of cards

The broader economic context explains why the CBN now appears more comfortable easing restrictions around card usage. According to the CBN Governor, Olayemi Cardoso, Nigeria’s external sector strengthened decisively in 2025, with the current account balance rising by over 85 per cent to $5.28bn in the second quarter from $2.85bn in the first quarter. Foreign reserves stood at $46.7bn by mid-November, providing more than 10 months of forward import cover. Analysts at United Capital Research have expressed optimism that Nigeria’s external reserves will continue their steady ascent in the final quarter of 2025, buoyed by stronger oil export receipts, robust diaspora remittances, and a favourable trade balance.

“With the reserves position strengthening, the CBN will have greater flexibility to sustain its interventionist approach in the FX market. This, in turn, should help to maintain relative stability in the naira across both official and parallel markets,” analysts at Cowry Assets said in a recent weekly market report.

For market operators, these metrics matter because they speak directly to the sustainability of policy choices. The President of the Association of Bureaux De Change Operators of Nigeria, Dr Aminu Gwadabe, said reforms in the FX market are yielding results, including the reactivation of international transactions on naira-denominated debit cards, which he said is benefiting travellers and businesses.

Also, the CBN’s Quarterly Statistical Bulletin for the first quarter of 2025 revealed that total foreign-exchange utilisation across the economy increased by 19 per cent quarter-on-quarter to $9.3bn in Q1 2025, representing a 39 per cent year-on-year growth. The rise was driven mainly by a surge in invisible transactions, such as services and transfers, which grew by 54 per cent quarter-on-quarter to $4.5bn. This category’s share of total FX usage expanded to about 48 per cent, up from 37 per cent in the fourth quarter of 2024.

These numbers indicate that the country is gradually rebuilding foreign-exchange buffers. Analysts at FBNQuest added that ample liquidity and attractive yields in the domestic market have supported robust investor participation in government securities auctions, further strengthening market stability and investor confidence in the naira.

Analysts broadly agree that the return of card functionality is tied to improved liquidity and reduced arbitrage. The Head of Financial Institutions Ratings at Agusto & Co, Ayokunle Olubunmi, said improved liquidity in the FX market supported banks’ decision to reactivate naira cards for global transactions. “The moderating premium on parallel market transactions and the reduced arbitrage opportunities are also responsible for the decision,” he said.

Data from recent months support that assessment. Nigeria attracted average monthly FX inflows of about $5.96bn from May 2025, with inflows in that month rising by 62 per cent month-on-month, driven largely by increased participation from domestic and foreign investors. Diaspora remittances, estimated at about $23bn annually, continue to provide a stable source of foreign exchange.

In a note to investors, analysts at Financial Derivatives Company Limited attributed rising inflows to a combination of higher oil prices and multiple FX channels activated by the CBN. These include new products to support diaspora remittances, licensing of additional international money transfer operators, adoption of a willing buyer, willing seller FX model and improved naira liquidity access for authorised dealers.

The impact is also visible in reserve quality. Net foreign-exchange reserves stood at $23.11bn at the end of last year, up from $3.99bn at the end of 2023. Cardoso said the improvement reflected deliberate policy choices, including a reduction in short-term FX liabilities and efforts to rebuild confidence. “This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” he said.

For consumers and businesses, the return of foreign card access and international naira card usage does not eliminate FX risk or policy uncertainty. But it signals a shift from blanket restrictions to more targeted controls, anchored on liquidity, monitoring and transparency. In that sense, the re-entry of foreign cards into Nigeria’s payment ecosystem is less about convenience alone and more about what it says about the direction of FX policy.