Nigeria’s Current Account Surplus Could Hit $8.69bn as Oil Earnings Strengthen

Higher Oil Earnings Push Nigeria Toward $8.69bn Current Account Surplus

Nigeria’s current account surplus could widen to $8.69 billion in the third quarter of 2026, strengthening the country’s external position as higher oil earnings, lower import demand and rising foreign reserves improve foreign-exchange conditions.

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The Financial Markets Dealers Association (FMDA), in its September 2026 Monthly Market Report, projected that the surplus would rise from $7.54 billion recorded in the second quarter.

The $8.69 billion figure remains a projection pending the release of official third-quarter balance-of-payments data. However, it points to continued improvement in Nigeria’s external accounts after the current account balance increased from $1.40 billion in Q4 2025 to $4.98 billion in Q1 2026 and $7.54 billion in Q2.

Oil Earnings and Lower Imports Support External Position

FMDA attributed the expected third-quarter improvement mainly to lower import demand and stronger crude oil earnings.

Nigeria’s trade balance also strengthened during the first half of the year, rising from $1.18 billion in Q4 2025 to $5.45 billion in Q1 and $9.22 billion in Q2.

The Q2 improvement reflected stronger petroleum exports. Crude oil, natural gas and refined petroleum products generated $16.96 billion during the quarter, representing a 29.76% increase from Q1.

Refined petroleum exports rose by 66.24% quarter-on-quarter to $3.94 billion, while crude oil export earnings increased to $9.39 billion.

Lower petroleum-related imports also helped Nigeria retain more foreign exchange and strengthen its trade position.

Rising Reserves Strengthen Nigeria’s External Buffer

The improvement in the current account has coincided with an increase in Nigeria’s external reserves.

FMDA reported that gross external reserves rose by about $1.11 billion, or 2.07%, to $54.92 billion at the end of September from $53.81 billion in August.

Higher reserves provide a stronger buffer against external shocks and can improve confidence in the foreign-exchange market.

The development is particularly important for businesses with significant foreign-currency exposure, including property developers and construction companies that depend on imported equipment, machinery and certain building inputs.

Naira Gains as FX Fundamentals Improve

The stronger external position has also supported the naira.

FMDA reported that the currency appreciated by 1.93% in September, with the Nigerian Foreign Exchange Market rate reaching ₦1,327.31 per dollar.

The association linked the improvement primarily to stronger foreign-exchange fundamentals, including higher oil receipts and sustained market confidence.

Average Brent crude also increased during September amid heightened geopolitical tensions in the Middle East.

However, FMDA expects oil prices to moderate as production recovers, highlighting the continued vulnerability of Nigeria’s external position to movements in the global oil market.

What Stronger External Accounts Mean for Housing

The projected current-account surplus will not directly translate into cheaper homes or automatically increase property demand. Its significance for the housing market lies in the broader economic conditions it can help create.

A stronger external position can support greater exchange-rate stability, improve investor confidence and reduce some of the uncertainty surrounding foreign-currency-linked construction costs.

For developers, greater stability in the naira can make project budgeting more predictable where imported equipment, machinery and materials form part of development costs.

It could also improve the wider investment environment. If stronger reserves and improved foreign-exchange liquidity are sustained, businesses may have greater visibility over capital expenditure and infrastructure projects, potentially supporting demand for commercial, industrial and logistics property.

Construction Costs Remain Sensitive to FX Stability

Nigeria’s construction industry remains exposed to exchange-rate movements because developers and contractors depend on imported equipment and materials at different stages of the development cycle.

A more stable naira can reduce the pace at which foreign-currency costs translate into higher naira-denominated project expenses.

However, the effect should not be overstated. Local building-material prices, energy costs, transport expenses, financing rates and land prices continue to influence development costs.

An improving current-account position could therefore provide a more stable macroeconomic backdrop without automatically reversing the accumulated increase in construction and property prices.

Current Account Improvement Builds on Q2 Gains

Nigeria entered the third quarter with a significantly stronger external position than at the beginning of the year.

The Q2 current-account surplus of $7.54 billion represented a 67.9% increase from $4.49 billion in Q1. The improvement was supported by stronger exports, including crude oil, gas and refined petroleum products, alongside lower crude-oil imports and higher remittance inflows.

The goods-account surplus reached $10.12 billion in Q2, while total exports rose to $20.08 billion.

The latest $8.69 billion FMDA projection therefore represents a continuation of the broader improvement in Nigeria’s external accounts rather than an isolated quarterly development.

Dangote IPO FX Impact Remains Limited for Now

FMDA also cautioned against attributing the recent improvement in foreign-exchange conditions primarily to the Dangote Petroleum Refinery IPO.

The association said the ₦2.15 trillion offer may have generated investor interest and some pre-positioning flows, but significant foreign-currency conversion was expected only after allotment.

The direct impact of the IPO on FX liquidity therefore remains limited in the available data.

Nigeria’s recent improvement in external indicators is more directly connected to stronger oil receipts, export performance, lower imports and rising reserves.

Stronger External Position Could Support Investment

For the wider economy, a sustained current-account surplus can strengthen Nigeria’s ability to withstand external shocks and improve investor confidence.

For housing and real estate, the potential benefits would emerge indirectly through improved macroeconomic stability, greater exchange-rate visibility and potentially stronger investment conditions.

Infrastructure investment could also benefit if improved economic conditions support greater public and private capital deployment into roads, utilities, industrial facilities and urban development.

The impact on residential housing, however, will depend more heavily on household incomes, mortgage availability, interest rates, construction costs and property prices.

Outlook

FMDA’s $8.69 billion Q3 projection signals continued improvement in Nigeria’s external position, but the strength of that improvement will ultimately depend on oil prices, production volumes, import demand and foreign-exchange flows.

The forecast also highlights the importance of reducing Nigeria’s dependence on oil. Higher oil earnings can strengthen reserves and the current account, but a more durable improvement will require broader export growth and stronger non-oil sources of foreign exchange.

For Nigeria’s housing and real estate market, stronger external accounts could provide a more stable foundation for investment by improving exchange-rate visibility and reducing some of the uncertainty facing developers and investors.

The key test will be whether this macroeconomic improvement translates into more predictable construction costs, stronger investment activity and better financing conditions across the built environment.

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