Foreign portfolio investments in Nigeria’s equities market totalled just N1.281 trillion in the first 11 months of 2025, accounting for only 20.77% of total transactions despite various capital market and FX reforms.
This is according to the November 2025 edition of the Domestic & Foreign Portfolio Investment Report published by the Nigerian Exchange (NGX).
The data highlights a sustained preference for caution among offshore investors amid lingering macroeconomic uncertainty, even as overall market turnover more than doubled year-on-year to N10.542 trillion.
What the data is saying
Between January and November 2025, total equity transactions on the NGX reached N10.542 trillion, with domestic investors contributing N8.761 trillion (79.23%) and foreign investors trailing at N1.281 trillion (20.77%).
- In November alone, the NGX recorded a turnover of N971.2 billion—a 5.95% drop from October’s N1.033 trillion.
- Domestic transactions accounted for N809.14 billion, a 4.35% decline, while foreign transactions dropped by 13.17% to N162.04 billion.
- Within domestic trades, institutional activity climbed 3.3% to N531.21 billion, while retail trades fell 16.21% to N277.93 billion.
These figures suggest a deepening divide in investor behaviour, with institutional players driving resilience in the face of volatility.
What they are saying
Analysts attribute the muted foreign inflows to inconsistent policy signals, especially surrounding Nigeria’s tax environment.
Tajudeen Olayinka, CEO of Wyoming Capital Partners, pointed to lingering investor scepticism over the implementation of the Capital Gains Tax (CGT), despite assurances from government officials such as Finance Minister Wale Edun and Tax Reform Committee Chair Taiwo Oyedele.
- “The muted FPI inflows reflect caution over recent developments in respect of the Capital Gains Tax (CGT). Foreign investors appear to be waiting for clearer signal.
- “For now, there are only assurances from government personalities like the Minister of Finance, Wale Edun, and his tax reforms counterpart, Taiwo Oyedele. Assurances are not enough,”
Similarly, David Adonri, CEO of Highcap Securities, acknowledged that recent FX reforms have improved sentiment but stressed that clarity and consistency are key.
- “The rebound in foreign participation reflects renewed confidence following reforms in Nigeria’s foreign exchange regime. The changes have enhanced transparency and stability, reducing uncertainty for foreign investors,” Adonri said.
Domestic resilience powers market liquidity
Despite weak foreign appetite, Nigeria’s equities market has witnessed one of its strongest liquidity runs in years—driven by robust domestic investor participation, particularly from institutional investors.
Total turnover more than doubled from N4.913 trillion in the same 11-month period of 2024 to N10.542 trillion in 2025.
November’s data shows that while retail investors retreated significantly, institutional players stepped in to sustain momentum, highlighting increasing professionalisation in domestic investing.
Foreign participation, on the other hand, has shown only marginal month-on-month growth throughout the year and remains well below pre-2024 levels.
Why this matter
The persistent underperformance of foreign inflows, even in the face of bold reforms, signals that market sentiment among global investors remains fragile.
Without a clear and sustained macroeconomic policy direction, especially around sustaining foreign exchange management and taxation—offshore investors may continue to stay on the sidelines.
“Domestic participation is cushioning the market, but persistent foreign outflows show that macroeconomic vulnerabilities still linger. Restoring offshore confidence will depend on sustaining FX reforms and stabilising the currency,” Adonri noted.
This matters because foreign portfolio investments play a crucial role in boosting liquidity, improving price discovery, and diversifying capital sources.
A continued lag in foreign interest could limit the depth and resilience of Nigeria’s capital market in the long term.
What you should know
- In July 2025, foreign inflows plunged 30.7% to N50.48 billion while outflows surged 43.6% to N95.47 billion, signalling persistent anxiety over Nigeria’s FX stability and inflation outlook.
- Domestic investors have dominated NGX activity for over a decade, contributing 85% of total trades in 2024 according to earlier NGX data.
- Despite foreign caution, 2025 has been a historic year for NGX turnover, fuelled largely by domestic block trades and institutional consolidation.
For further insight, see our earlier report: NGX attracts N3.48 trillion in institutional trades by H1 2025
With just days left in the year, the data shows that Nigeria’s capital market growth in 2025 has been powered largely by local resilience, not foreign capital—leaving reformers with a clear message: confidence is built not by promises, but by consistency.
