FDI Falls To 4% of Capital Inflows, Signaling Exclusion Of Real Investors

Foreign direct investment (FDI) in Nigeria fell to 3.97 per cent of total capital imports in 2025, totalling $923 million (N1.5 trillion), according to National Bureau of Statistics (NBS) data. This marked an increase of 37 per cent from $675 million (N1.1 trillion) in 2024, but represented a reduced share compared to the previous year.

FDI flows by quarter were $126 million in Q1, $143 million in Q2, $296 million in Q3, and $358 million in Q4, with equity capital accounting for 94 per cent ($868 million).

Manufacturing and solid minerals sectors recorded some inflows, while oil and gas saw limited activity.

Total capital imports reached $23.22 billion (N37.2 trillion) in 2025, a 90 per cent increase from $12.32 billion (N19.7 trillion) in 2024.

Foreign portfolio investment comprised $19.74 billion (N31.6 trillion), or 85 per cent of inflows, up from $8.38 billion (N13.4 trillion).

This included $13.83 billion (N22.1 trillion) in money market instruments, $4.89 billion (N7.8 trillion) in bonds, and $2.10 billion (N3.4 trillion) in equities.

Other investments, such as loans, fell to $2.55 billion (N4.1 trillion) from $3.27 billion (N5.2 trillion). The United Kingdom accounted for 58 per cent of inflows, with banking receiving the largest sectoral share.

The capital imports have supported external reserves above $35 billion and reduced dollar shortages.

President Tinubu’s reforms, including naira floatation and subsidy removal, contributed to the overall inflow increase as markets stabilise into 2026. However, the low FDI level highlights limited long-term investment amid ongoing economic challenges.

However, the economy’s vulnerability to external shocks—like US Fed hikes or oil price dips—remains high without diversified FDI.

Meanwhile, capital imports rose nearly 90 per cent last year to a whopping $23.22 billion (N37.2 trillion), up from $12.32 billion (N19.7 trillion) in 2024.

This dramatic surge signals foreign investors’  i to Nigerian markets, lured by sky-high bond yields following President Bola Tinubu’s sweeping economic reforms—including naira floatation, fuel subsidy removal, and forex market unification—that tamed hyperinflation and restored market confidence.