Nigeria’s Capital Inflows Surge By 67% To $5.64 Billion In Q1 2025, Boosted By Portfolio Investments.
Nigeria has recorded a remarkable 67.12% increase in capital importation, reaching $5.64 billion in the first quarter of 2025, according to the National Bureau of Statistics (NBS). The figure, detailed in the NBS’s “Nigeria Capital Importation Q1 2025” report, marks a significant rise from the $3.38 billion recorded in the same period of 2024. Additionally, it reflects a 10.86% increase from the $5.09 billion reported in the final quarter of 2024, signalling growing investor confidence in the nation’s economy.
The surge was predominantly driven by portfolio investments, which accounted for $5.2 billion or 92.25% of the total inflows. Other investments contributed $311.17 million (5.52%), while foreign direct investment (FDI) remained the smallest component at $126.29 million, representing just 2.24%. The banking sector led the charge, attracting $3.13 billion, or 55.44% of the total capital imported, followed by the financing sector with $2.1 billion (37.18%). The manufacturing sector, however, saw a modest $129.92 million, underscoring the dominance of financial markets in attracting foreign capital.
Geographically, the Federal Capital Territory (FCT), Abuja, emerged as the top destination for foreign inflows, securing $3.05 billion or 54.11% of the total, overtaking Lagos for the first time since Q1 2018. Lagos followed closely with $2.56 billion (45.44%), while Ogun, Oyo, and Kaduna states recorded marginal inflows of $7.95 million, $7.81 million, and $4.06 million, respectively. The United Kingdom was the largest source of capital, contributing $3.68 billion (65.26%), followed by South Africa with $501.29 million (8.88%) and Mauritius with $394.51 million (6.99%).
Among financial institutions, Standard Chartered Bank Nigeria Ltd facilitated the highest inflow, receiving $2.1 billion, followed by Stanbic IBTC Bank Plc with $1.4 billion and Citibank Nigeria Limited with $1.05 billion. Analysts attribute the influx to Nigeria’s high-yield environment, particularly in money market instruments like OMO bills and Treasury Bills, driven by the Central Bank of Nigeria’s hawkish monetary policy. However, experts, including Dr. Bismarck Rewane, CEO of Financial Derivatives Company, caution that the heavy reliance on portfolio investments, often described as “hot money,” poses risks due to their volatility and susceptibility to rapid reversals if policy or global conditions shift.
The NBS report highlights Nigeria’s improving appeal to short-term investors, particularly in debt and equity markets, bolstered by macroeconomic reforms such as subsidy removal and naira flotation. Yet, the low FDI share has sparked calls for broader economic reforms to attract long-term investments that could drive job creation and sustainable growth. Adewunmi Adesina, an investment strategist, noted the need for subnational reforms to enhance the ease of doing business across more states, given that only five states attracted capital inflows in Q1 2025.
This robust performance underscores Nigeria’s potential as a leading investment destination in Africa, though sustaining this momentum will require careful policy navigation to balance short-term gains with long-term economic stability.