More Investment Funds Flow Into Nigeria In Q1 of 2025
According to the report from the National Bureau of Statistics (NBS), Nigeria experienced a total capital importation or investment funds of US$5.64 billion in the first quarter of 2025. This represents a notable increase of 67.12% compared to the US$3.38 billion recorded in Q1 2024, as well as a 10.86% rise from the US$5.09 billion noted in Q4 2024.
The increase indicates a resurgence in investor confidence, primarily fueled by short-term inflows. Portfolio investment was the predominant form of capital importation, making up 92.25% of the total at US$5.20 billion. Following this, other investments amounted to US$311.17 million (5.52%), while foreign direct investment (FDI) remained relatively low at only US$126.29 million (2.24%).
This distribution implies that although Nigeria is appealing for quick-return capital, long-term investor confidence is still lacking. The banking and financing sectors attracted the majority of inflows, collectively accounting for over 92% of the total. The primary source of capital was the United Kingdom, succeeded by South Africa and Mauritius. Abuja (FCT) and Lagos State emerged as the leading destinations, receiving more than 99% of all inflows.
Standard Chartered, Stanbic IBTC, and Citibank were identified as the top recipient banks. While the increase in portfolio flows is beneficial in the short term, Nigeria’s heavy dependence on them presents considerable risks.
To enhance FDI, the government should focus on ensuring regulatory stability, advancing infrastructure development, implementing real sector reforms, and broadening investor outreach. It is essential to diversify capital sources and sectors to foster long-term economic growth and job creation.
