BUSINESS TRAVEL FOREIGN EXCHANGE SURGES 366% TO $672M
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By: Balogun Ibrahim
Access to foreign exchange by Nigerians surged, driving a 366 per cent increase in spending on business travel to $672.27m in the first nine months of 2025, up from $144.19m during the same period in 2024.
Data from the Balance of Payments section of the Central Bank of Nigeria’s December 2025 Quarterly Statistics show that business travel outlays stood at $231.7m in Q1 2025, rose slightly to $234.56m in Q2, and eased to $205.97m in Q3, bringing the nine-month total to $672.27m.
By comparison, expenditures for business travel in 2024 were $77.33m in Q1, dropped to $46.62m in Q2, and fell further to $20.24m in Q3, totalling $144.19m over the same period.
Business travel refers to expenses incurred by Nigerian residents traveling abroad for work-related activities, including meetings, conferences, training sessions, and other professional engagements.
Payments for these trips including accommodation, local transport, and meals are recorded as outflows in the Balance of Payments (BoP). Because funds leave Nigeria to cover these expenses abroad, they appear as debits (negative entries) under the current account for services, with airfares and tickets excluded.
Central Bank of Nigeria (CBN) data show that travellers had greater access to foreign exchange for business trips during the period, reflecting increased international business activity.
In separate interviews with The Media, economic analysts and experts noted that the trend indicates renewed business confidence and improved foreign exchange stability.
The rise in business travel spending reflects growing confidence in international trade and stronger economic stability.
He explained, “An increase in business travel costs signals an improvement in confidence in international trade, because there is a direct link between travel frequency and the volume of international business. Whether in services or merchandise, trade drives travel. Without cross-border transactions that require physical movement, there would be no such travel.”
Yusuf added that the trend highlights Nigeria’s expanding integration with the global economy, noting, “This shows the broader stability and confidence in the economy. More Nigerians are able to travel to meet business partners, and vice versa. The figures on business travel clearly reflect this dynamic.”
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The CPPE director also pointed out that improved foreign exchange liquidity and exchange rate stability strengthened international trade flows in 2025 compared with previous years.
He noted that with a stable dollar and higher liquidity in the FX market, international trade and investments received a significant boost.
Meanwhile, former Chairman of the Chartered Institute of Bankers of Nigeria, Prof Segun Ajibola, explained how this relationship contributes to the recent surge in business travel expenditures.
Supporting CPPE’s Yusuf, the economist observed that the rise in business travel spending may reflect both an expansion in business activities and higher travel costs.
He explained, “The 366 per cent surge in business travel expenditure can be seen as both positive and negative. On one hand, travel is a cost for companies, driven by increased business activities—whether executives are pursuing new contracts, expanding existing operations abroad, or hosting foreign partners domestically at their own expense.”
The former Chartered Institute of Bankers of Nigeria leader added that if the rise is driven by business expansion, it could positively affect economic output. “In such a case, it reflects higher business volumes, which contribute to GDP as companies incur these expenses while generating more revenue,” he said.
Meanwhile, Adewale Oyerinde business executive”], Director-General of the Nigerian Employers’ Consultative Association, noted that business travel spending affects the country’s net cash outflows. He stressed the need for proportional or increased export earnings to offset the spending, warning that unchecked outflows could deplete foreign reserves and widen current account deficits.
He explained, “Rising business travel costs impact the BoP services account, a significant component of transactions, and can increase net cash outflows. Without a corresponding level of exports or remittances, foreign reserves could be depleted and the current account deficit could widen.”
Oyerinde also highlighted the effects of foreign exchange volatility, noting that the naira remains devalued and high hotel costs add to the total USD outflow.
“Despite a Q3 2025 BoP surplus of $4.60bn, total services net outflows rose from $3.74bn in the previous quarter to $4.07bn, with travel-related outflows alone reaching $1.67bn, putting pressure on external buffers even as foreign reserves grow to $42.77bn,” he said.
On the broader economic impact, he added that increased costs for business travel can squeeze profit margins for companies operating in Nigeria.
He said, “Multinationals and exporters reliant on global supply chains are under severe pressure from rising hotel rates—up 40 per cent in Lagos and Abuja—driven by fuel scarcity and an unstable foreign exchange market.”
Oyerinde noted that companies face a choice: “Either reduce physical travel by adopting virtual alternatives or absorb the financial burden of high transportation and accommodation costs. Both options are likely to erode a company’s investment capital.”
He added that for large companies planning major expenditures, these rising costs signal persistent strain on their investments.
“The continuous increase in the cost of doing business could affect a company’s expansion plans or its ability to remain competitive, even in a high-growth environment reflected by a Purchasing Managers Index of 57.6 in December 2025, within a cost-compressed economy,” he concluded.
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