Nigeria, despite being the largest economy and most populous country in Sub-Saharan Africa (SSA), has not established itself as a significant source of foreign direct investment (FDI) or remittances in the region.
This was noted in the latest Global Economic Prospects 2025 report published by the World Bank.
The report noted that while Nigerian banks have expanded their presence across SSA, the country’s broader contributions to regional investment and financial flows remain modest.
This limited role contrasts sharply with Nigeria’s economic size and potential.
According to the World Bank, Nigeria’s participation in intraregional trade and investment remains below expectations.
The report read, “Despite having the largest economy and population in SSA, Nigeria has a modest intraregional role as an export destination and does not yet have a substantial role as a source of FDI or remittances, although its banks have a regional presence.”
What you should know
Nairametrics earlier reported that the World Bank projected that Nigeria’s economy will grow by 3.5% in 2025 and improve slightly to 3.7% in 2026, driven by increased services sector activity and gradual improvements in macroeconomic stability.
- Growth in Nigeria increased to an estimated 3.3% in 2024, primarily driven by strong performance in the services sector, notably in financial and telecommunication services.
- The World Bank noted that macroeconomic and fiscal reforms implemented in 2024 helped improve business confidence.
- The projected growth for 2025 and 2026 reflects an expected rebound in consumption, supported by gradually declining inflation following monetary policy tightening by the Central Bank of Nigeria in 2024.
- The services sector is anticipated to remain the main driver of growth, while oil production is expected to increase modestly but remain below the country’s OPEC quota.
Also, Nairametrics earlier reported that Nigeria’s total Capital Importation for the third quarter (Q3) of 2024 witnessed a 51.90% decline from the previous quarter, falling to $1.25 billion.
- This drop, compared to the $2.60 billion recorded in Q2 2024, highlights a sharp contraction in foreign investments despite an overall annual increase of 91.35% from Q3 2023.
- Portfolio investment dominated the inflows in Q3 2024, contributing $899.31 million (71.79%) of the total capital.
- This reflects continued investor interest in Nigerian equities, bonds, and other financial assets despite the broader decline.
Other investments followed with $249.53 million, representing 19.92%, while Foreign Direct Investment (FDI), a critical indicator of long-term investor confidence, accounted for just $103.82 million, or 8.29%, marking a relative underperformance.
- Capital importation in Q3 2024 was predominantly sourced from the United Kingdom, which accounted for $502.60 million (40.12%) of the total capital inflows.
- This was followed by South Africa, with $185.03 million (14.77%) and the United States, contributing $163.86 million (13.08%).
- The dominance of the UK and South Africa reflects ongoing investment flows from major African and European economies into Nigeria, despite the overall decrease in inflows during the quarter.
Lagos continued to dominate as the primary destination for capital inflows, receiving $650.41 million, or 51.92% of the total capital imported in Q3 2024.
The Federal Capital Territory (FCT), which includes Abuja, secured $600.02 million (47.90%), demonstrating the significant role of Nigeria’s political and economic hubs in attracting foreign investment.
