Nigeria attracted only $565.21 million in Foreign Direct Investment (FDI) in the first nine months (9M) of 2025, despite a broad surge in overall capital inflows, according to the latest data from the National Bureau of Statistics (NBS).
The figures indicate that while headline capital importation into the country has been strong, the bulk of funds entering Nigeria continues to be short-term and portfolio-driven.
The trend seen in both Q2 and Q3, 2025, which NBS released together, mirrors similar patterns in earlier Q1, raising concerns about the economy’s ability to attract long-term, productivity-enhancing investments.
What the data is saying
Capital importation into Nigeria remained elevated throughout the first three quarters of 2025, supported by robust quarterly inflows:
- Q1 2025: $5.64 billion
- Q2 2025: $5.12 billion
- Q3 2025: $6.01 billion
Year-to-date inflows for 2025 reached approximately $16.78 billion, already surpassing the $12.32 billion recorded for the entire 2024. Yet, FDI — often regarded as the most stable and growth-supportive form of foreign capital — accounted for just $565.21 million across the three quarters.
- FDI rose from $126.29 million in Q1 to $142.67 million in Q2 and nearly doubled to $296.25 million in Q3.
- Despite this sequential improvement, FDI represents only about 3.3% of total capital inflows in 9M 2025.
- Portfolio investment and other short-term inflows dominated, exceeding $14 billion during the same period.
The data highlights the structural imbalance between headline inflows and the type of capital entering Nigeria, with portfolio and hot money continuing to overshadow long-term investment.
Backstory
The surge in Nigeria’s capital importation in 2025 has been largely driven by foreign portfolio investors attracted to elevated domestic interest rates and high yields on treasury bills, bonds, and other money market instruments.
While FDI more than doubled compared to the $252 million recorded in the same period of 2024, this improvement is modest relative to the explosive growth in short-term capital flows.
The trend is not new: in 2024, capital inflows were similarly skewed toward portfolio investment, leaving long-term productive investment subdued.
More insights
The Q3 pickup in FDI at $296.25 million reflects a gradual recovery after a slow start to the year but remains small compared to portfolio investment, which alone accounted for $4.85 billion in the quarter.
- Financial services continue to dominate capital importation, with the banking sector attracting over $3.14 billion in Q3.
- The financing sector followed with $1.86 billion in inflows.
- Production and manufacturing received just $261.35 million, showing limited investment in sectors linked to job creation and industrial expansion.
- Major sources of capital included the United Kingdom ($2.94 billion in Q3), the United States ($950.47 million), and South Africa ($773.95 million), though NBS data does not disaggregate FDI versus portfolio inflows.
These insights highlight the ongoing reliance on short-term investments rather than long-term, growth-supporting capital.
What you should know
Nigeria’s capital inflows in 2025 already exceed full-year 2024 levels, presenting a strong headline narrative.
- However, the composition reveals that FDI accounted for just 3.3% of total inflows in 9M 2025, with the majority of foreign capital being short-term and yield-driven.
- Unlike portfolio investment, FDI typically supports factory construction, infrastructure development, and long-term business expansion.
The key takeaway is clear: while Nigeria is attracting foreign capital, it is largely not in the form that drives durable economic growth, employment, or structural transformation.
