Rise in Nigeria’s external reserves increases letters of credit 4% in M4 2025
By Jeph Ajobaju, Chief Copy Editor
Nigeria’s foreign trade gleaned from Letters of Credit (LC) rose 4.4 per cent year-on-year (YoY) to $269.83 million in the first four months of 2025 (M4 2025) from $258.46 million in M4 2024, according to the latest Central Bank of Nigeria (CBN) International Payments data.
A letter of credit is a bank document guarantying payment for imports upon shipment.
Until very recent, Nigerian importers faced LC non-acceptance by foreign partners due to difficulties caused by Nigeria’s weak foreign reserves, which forced importers to pay before shipment.
The CBN has announced that the country as of May 16 has $38.90 billion external (or foreign) reserves that are used to guarantee payments for imports.
However, month-on-Month (MoM) transaction volume in M4 2025 still shows relative fluctuation as follows:
- February – 48 per cent rise to N95.6 million from $64.55 million in January.
- March – 54.4 per cent decline to $43.53 million.
- April – 47.7 per cent increase to $64.3 million.
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