Foreign Direct Investment (FDI) into Nigeria rose sharply to $720 million in Q3 2025, up from $90 million recorded in Q2 2025, a rise of 700% quarter-on-quarter.
This is according to the Central Bank of Nigeria’s Balance of Payments (BoP) Highlights for the period.
Year-on-year, FDI inflows were also higher than the $570 million posted in Q3 2024, representing a 26.3% increase.
What the report says
The report shows that Direct Investment liabilities, which capture FDI inflows into the Nigerian economy, recorded $0.72 billion in Q3 2025, making it the strongest FDI quarter so far in 2025.
It read, “Direct Investment (DI) into the economy recorded a much higher inflow of US$0.72 billion in Q3 2025 as against US$0.09 billion recorded in Q2 2025.”
The jump contrasts with persistent concerns in recent years over weak investor confidence, elevated macro-economic risk, and constrained capital inflows.
The CBN data shows that the FDI rebound in Q3 2025 coincided with improved external-sector indicators. Nigeria posted an overall balance-of-payments surplus of $4.60 billion, while external reserves rose to $42.77 billion as at the end of September 2025 from $37.81 billion at end-June 2025.
The financial account also switched to a net lending position of $0.32 billion from net borrowing of $6.90 billion in Q2, a sign that the country accumulated more external assets during the quarter.
At the same time, portfolio investment inflows fell to $2.51 billion in Q3 compared with $5.28 billion in Q2 2025. This suggests that while short-term capital inflows moderated, long-term equity-type investments — considered more stable — strengthened during the quarter.
What the numbers say about investor sentiment
The CBN attributed broader movements in the financial account to increased inflows of direct investment liabilities, improved participation in domestically issued instruments earlier in the year, and higher reserve asset accumulation.
FDI flows are typically seen as a stronger gauge of investor confidence because they involve long-term equity participation and reinvestment of earnings rather than speculative flows.
Although still modest compared to Nigeria’s investment potential and historical levels, the return to a significantly higher FDI inflow marks a shift from the subdued flows seen over multiple quarters.
However, the data also shows continued repatriation of reinvested earnings by domestic banks on their foreign assets, which contributed to a wider primary income debit of $2.95 billion in Q3 2025.
This highlights that foreign-owned earnings and profit outflows remain a drag on the current account despite the improvement in headline FDI numbers.
The improvement in FDI inflows came during a quarter where Nigeria also reported a current account surplus of $3.42 billion, driven largely by crude oil and refined-product export earnings as well as steady diaspora remittances. Crude oil export receipts increased to $8.45 billion, while refined-product exports rose to $2.29 billion. The CBN also noted that refined-fuel imports continued to decline.
These trends supported FX liquidity and reserve accumulation, which are critical determinants of investor appetite for long-term capital exposure.
What you should know
- Nigeria has faced structurally weak FDI inflows in recent years due to currency instability, policy uncertainty, infrastructure constraints, and security concerns.
- Nairametrics earlier reported that Foreign direct investment (FDI) inflows into Nigeria declined by 19% to $250 million in Q1 2025, compared to $310 million in the previous quarter.
- The sharp rise in Q3 inflows signals renewed risk appetite among foreign investors — likely supported by FX-market reforms, ongoing fiscal and monetary policy adjustments, and higher oil-sector earnings.
