In 2025, Nigeria experienced a net foreign portfolio inflow of N161.05 billion into equities, signaling a cautious yet improving foreign risk appetite amidst ongoing market volatility.
Total foreign inflows for the year amounted to N1.40 trillion, slightly exceeding outflows of N1.24 trillion, resulting in a positive, albeit fragile, net position.
With the exception of September, net foreign inflows were generally modest.
March saw a near-neutral position (N0.05 billion), while May (N13.31 billion), June (N6.33 billion), and August (N18.47 billion) saw incremental support.
Notably, although August’s N18.47 billion inflow was the second largest of the year, it was still less than one-tenth of the surge seen in September, illustrating the skewed nature of the annual result.
The positive net foreign inflow in 2025 marked a clear recovery from the net outflow of 2024, where foreign portfolio outflows totalled N455.62 billion, surpassing inflows of N396.41 billion, resulting in a net outflow of N59.21 billion.
In December 2025, a sharp increase in total foreign transaction value was largely driven by block trades, rather than broad-based market participation. Despite gross flows of N223.79 billion in inflows and N234.30 billion in outflows, the month ended with a net outflow, suggesting that large trades did not translate into sustained net buying interest.
Foreign portfolio activity significantly ramped up in 2025. Foreign inflows rose by 254.24% year-on-year, while outflows also surged by 172.86%, reflecting a notable increase in foreign investor activity on both sides of the market.
In total, foreign portfolio transactions in 2025 reached N2.65 trillion, more than tripling the N852.03 billion recorded in 2024, representing a 210.72% year-on-year increase. This surge indicates a return of foreign capital to Nigeria’s equity market, although the increase was driven by higher turnover and continued two-way trading, rather than one-directional inflows.
A year of profit-taking
Throughout most of 2025, foreign portfolio flows were marked by net outflows, reflecting a market characterized by frequent profit-taking and tactical exits. Negative net flows were recorded in January, February, April, July, October, November, and December, suggesting that foreign investors were selling as much as, if not more than, they were buying.
The sharp net outflow of N44.99 billion in July, alongside sustained losses in November (N36.66 billion) and December (N10.51 billion), suggests that foreign investors remained sensitive to price rallies, foreign exchange considerations, and macroeconomic risks, preferring to lock in profits rather than increase long-term exposure.
Key drivers of FPI in 2025
Foreign participation in 2025 was highly uneven, with activity concentrated in a few months. The positive net inflow for the year was almost entirely driven by September, which alone contributed N263.30 billion—more than the total net inflow for the entire year.
In September, foreign inflows surged to N325.46 billion, while outflows were kept at N62.16 billion. This points to a major portfolio reallocation, index-driven positioning, or large block trades into specific Nigerian equities.
Without this single month, 2025 would have closed with a net outflow, highlighting the fragile nature of foreign investor confidence.
While fixed-income assets remained attractive, Nigerian equities benefited indirectly from the high-interest-rate environment, serving as a secondary investment option in a yield-driven market rather than the primary destination for foreign capital.
Foreign exchange (FX) market reform, including FX unification and improved price discovery, reduced repatriation risk and reopened access for foreign investors. However, lingering uncertainty around FX stability meant that re-entry into the market was largely tactical and short-term, rather than driven by long-term conviction.
Headline foreign portfolio inflows were primarily driven by isolated block trades, index rebalancing, and institutional portfolio reallocations, inflating monthly inflow figures but not reflecting broad-based foreign participation.
Global liquidity conditions and frontier market rotation- expectations of easing global monetary policy prompted episodic rotations into frontier markets, enabling Nigeria to attract tactical inflows. However, competition from other frontier markets limited the scale and sustainability of foreign participation.
Tax reform and fiscal signaling – tax reforms bolstered medium-term policy credibility and alleviated concerns about arbitrary revenue measures. While not a direct driver of inflows, these reforms acted as a confidence anchor, supporting selective foreign participation when paired with greater FX clarity.
What the 2025 flow pattern indicates
The foreign equity flows in 2025 reflect selective engagement rather than long-term conviction investing. While Nigeria’s market remained attractive to offshore investors, foreign participation was episodic, event-driven, and highly influenced by liquidity windows rather than sustained, long-term positioning.
Although the positive net outcome is encouraging, it remains structurally weak, heavily reliant on a single month’s inflow.
For foreign portfolio investment to become more durable, greater macroeconomic stability, clearer FX policies, and improved earnings visibility will be crucial in converting sporadic inflows into long-term capital commitments.
