Nigeria Economic Update, Issue 32

According to the National Bureau of Statistics (NBS) report, Nigeria recorded a total capital importation of US$5.64 billion in the first quarter of 2025. This marked a significant 67.12% increase compared to the US$3.38 billion recorded in Q1 2024 and a 10.86% rise from the US$5.09 billion recorded in Q4 2024. The surge reflects renewed investor confidence, largely driven by short-term inflows. Portfolio investment dominated capital importation, accounting for 92.25% of the total at US$5.20 billion. Other investment followed with US$311.17 million (5.52%), while foreign direct investment (FDI) remained low at just US$126.29 million (2.24%). This composition suggests that while Nigeria remains attractive for quick return capital, long-term investor confidence remains weak. The banking and financing sectors received the bulk of inflows, jointly accounting for over 92% of the total. Capital came predominantly from the United Kingdom, followed by South Africa and Mauritius. Abuja (FCT) and Lagos State were the top destinations, receiving over 99% of all inflows. Standard Chartered, Stanbic IBTC, and Citibank were the leading recipient banks. While rising portfolio flows were positive in the short term, Nigeria’s overreliance on them poses significant risks. To boost FDI, the government should prioritise regulatory stability, infrastructure development, real sector reforms, and expanded investor outreach. Diversifying capital sources and sectors is crucial for boosting long-term economic growth and employment. 

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