Foreign direct investment (FDI) accounted for less than 4% of total capital imported into Nigeria in 2025, according to data from the latest capital importation report from the National Bureau of Statistics (NBS).
The data shows the country’s external capital inflows remained heavily tilted toward more mobile portfolio funds despite an improvement in absolute FDI volumes.
Nairametrics observed that while total inflows strengthened markedly in 2025, the bulk of that increase came from foreign portfolio investors rather than long-term direct investors typically associated with factory investment, business expansion, and durable job creation.
What the data shows
Data from the NBS report showed that Nigeria recorded total capital importation of $23.22 billion in 2025, up sharply from $12.32 billion in 2024.
But out of the 2025 total, FDI contributed just $923.01 million, representing 3.97% of aggregate inflows.
That compares with $674.71 million in 2024, when FDI accounted for 5.48% of total capital importation.
This means FDI rose by $248.30 million year on year, or about 36.8%, but its share of total inflows still fell by 1.51 percentage points as faster growth in portfolio investment widened the gap.
Portfolio flows dominated 2025 inflows
A breakdown of the data showed that portfolio investment remained the clear driver of capital importation in 2025. Portfolio inflows stood at $19.74 billion, more than double the $8.38 billion recorded in 2024.
- This means portfolio investment accounted for 85.03% of total capital importation in 2025, up from 68.00% in 2024. In effect, more than eight out of every ten dollars that entered Nigeria during the year came through portfolio channels.
- Quarterly data showed the dominance was consistent throughout the year. Portfolio investment made up 92.25% of total capital importation in the first quarter of 2025, before easing to 82.02% in the second quarter, 80.70% in the third quarter, and rising again to 85.14% in the fourth quarter.
- By contrast, FDI’s quarterly contribution remained weak throughout the year. It accounted for 2.24% of total inflows in Q1 2025, 2.79% in Q2, 4.93% in Q3, and 5.55% in Q4.
Although the second half showed some improvement, FDI still remained a marginal component of overall capital importation.
The contrast becomes even clearer when viewed in nominal terms. In 2025, portfolio inflows of $19.74 billion were more than 21 times the size of FDI inflows at $923.01 million.
FDI improved in value, but not enough to shift the structure
On a quarterly basis, FDI rose across 2025 from $126.29 million in Q1 to $142.67 million in Q2, then climbed sharply to $296.25 million in Q3 before reaching $357.80 million in Q4.
This shows a clear strengthening in direct investment momentum during the year, especially in the second half. Q4 was the strongest quarter for FDI in 2025 and accounted for roughly 38.8% of the full-year FDI total.
Combined, Q3 and Q4 delivered $654.05 million, meaning about 70.9% of all FDI recorded in 2025 came in the second half of the year.
That said, the broader picture remains weak. Even the full-year FDI total of $923.01 million was still below the value of portfolio investment recorded in each individual quarter of 2025. Q1 portfolio inflows alone stood at $5.20 billion, while Q4 reached $5.49 billion.
Within FDI, equity capital remained the dominant component. FDI equity stood at $868.29 million in 2025, accounting for about 94.1% of total FDI.
This was up strongly from $419.41 million in Q4 2024 to $321.96 million in Q4 2025 on a quarterly end-point basis, while annual equity inflows more than doubled from the visible 2024 quarterly pattern to a 2025 total of $868.29 million.
- “Other capital” under FDI remained relatively small, but it increased materially in 2025. It rose to $54.72 million from $9.20 million in 2024. Quarterly figures show this component moved from $1.98 million in Q1 to $2.26 million in Q2, then rose to $14.64 million in Q3 and $35.84 million in Q4, suggesting that even the improvement in FDI was still narrow and concentrated.
What you should know
The 2025 data shows two things at once. First, Nigeria succeeded in attracting significantly more foreign capital than it did in 2024.
- Second, the structure of those inflows remained skewed toward short-term and yield-seeking investments rather than long-term productive capital.
- That matters because portfolio flows can support liquidity and signal foreign investor interest, but they are often more sensitive to changes in interest rates, exchange rate expectations, global risk appetite, and domestic macroeconomic conditions.
- FDI, by contrast, is usually seen as a stronger signal of investor confidence in the real economy.
So, while the rise in FDI from $674.71 million to $923.01 million is a positive development, the fact that it still represented just 3.97% of total capital importation shows that Nigeria has not yet achieved a meaningful shift toward deeper, more stable foreign investment.
The picture is very clear. But the narrative is distorted.
After the 2016 recession driven by oil price crash. Nigeria began to recover. By 2018 and 2019 Nigeria was recognized for reforms twice by world bank ease of business.
By 2019, rebased GDP showed almost 4% growth.
FPI in 2019 was $ 24 billion. Highest ever.
Then covid struck and destroyed the growth.
Imagine there was no covid.
FPI would be at maybe $ 50 bn today.
After covid recession happened again.
By 2022, growth recovered to 4.32% according to NBS rebased data.
Then reforms came and growth slowed down again and has not yet recovered to 2022 level.
In 2025 it was 3.8%. Imagine there was no reform, perhaps growth would be over 6% by now.
FPI has almost recovered to 2019 level.
So Nigeria lost a few years due to covid and also impact of reforms. If there was no covid Nigerias FPI and FDI would be higher today.
Growth would be 6% and above.
The correct picture was that aside from covid, Nigeria had reached 4% considered high growth and was upwards.
13 new sectors had been added to the economy.
Growth was 41% higher than previously thought.
GDP had crossed $ 600 bn according to NBS.
Unemployment fell to 4.1% according to NBS.
But the problem was narrative.
Most economic commentators failed to see or acknowledge these numbers. And so the wrong economic narrative was embraced. The narrative of “lost years.”
In a bid to correct this wrong narrative new policies were introduced.
Instead of strengthening the policies that gave us results above aside from covid, we embarked on something new.
Something that sounded attractive. And I guess regional stereotype played.
But today, the data is clear. Nigeria was always on course. It needed servicing not overhaul.
Overhaul has been celebrated by some, but caused loss of territory.
However, a correction is possible and is clearly happening.
Policies that were once decided are being embraced.
CBN is subtly managing exchange rates again, without calling it so.
FG is hedging fuel prices indirectly through naira for fuel.
Agric programs are back on the table albeit through other names.
Social security is back.
Export and import restrictions of fuel, Shea butter and other products, are necessary and back.
Borrowing is back.
The lesson for the future is that consistency and improvement will always produce better results than dismantling and starting afresh