Dollar demand drops 35% as naira strengthens on official market

Demand for foreign exchange by end-users in Nigeria fell by 35.23 per cent to $3.42bn in April 2026, easing pressure on the dollar market as the naira recorded modest gains. Data from the Central Bank of Nigeria showed that foreign exchange utilisation across economic sectors declined during the month, while the naira strengthened at the official market.

Naira gains ground

The monthly average exchange rate improved 1.38 per cent to N1,361.22 per dollar in April from N1,379.98 in March. At the end of the month, the naira closed at N1,374.94 per dollar at the Nigerian Foreign Exchange Market, compared with N1,386.72 at the end of March.

Visible imports accounted for 41.92 per cent of total FX utilisation, while invisible imports represented the remaining 58.08 per cent.

Sector breakdown

Industrial activities were the largest users of foreign exchange among visible imports, accounting for 37.44 per cent of total utilisation. Manufactured products followed with 21.85 per cent, oil imports with 20.11 per cent and food products with 14.47 per cent.

Transport-related imports accounted for 3.54 per cent, while minerals and agriculture represented 1.47 per cent and 1.12 per cent respectively. Within invisible imports, financial services dominated, accounting for 91.51 per cent of total utilisation. Business services represented 4.37 per cent, transport services 2.58 per cent and communication services 0.84 per cent.

Turnover and inflows

The decline in demand was accompanied by weaker activity in the official foreign exchange market. Average FX turnover fell 26.97 per cent to $442.54m in April from $605.93m in March.

Despite the lower demand and turnover, Nigeria recorded a stronger net foreign exchange position during the month. Net FX inflows rose to $5.85bn in April from $4.16bn in March, driven largely by a sharper decline in outflows.

Aggregate FX inflows fell to $8.71bn from $9.70bn, but total outflows dropped more significantly to $2.86bn from $5.54bn. The banking system recorded a net outflow of $180m, down substantially from $1.66bn in March, while autonomous sources generated a net inflow of $6.02bn.

Reserves and outlook

The CBN said the country's external reserves remained broadly stable at $48.32bn at the end of April, compared with $48.35bn in March. The reserves provided about 10 months of import cover, significantly above the international benchmark of three months.

For Nigerian businesses and consumers, the combination of weaker dollar demand, higher net inflows and stable reserves suggests continued near-term support for the naira. The sharp drop in outflows points to reduced pressure on the official market, though lower turnover also signals cautious activity among end-users.