Nigeria recorded a sharp increase in foreign portfolio investment inflows in January 2026, with hot money inflows rising to $3.37 billion and accounting for 95.72% of the country’s total capital importation.
This was according to the latest Economic Report released by the Central Bank of Nigeria (CBN).
The report showed that total capital inflows into the economy rose to $3.52 billion in January, representing an increase of 181.6% from the $1.25 billion recorded in December 2025, driven largely by foreign investors’ increased appetite for Nigerian bonds and money market instruments.
The surge comes as Nigeria continues to benefit from improved macroeconomic conditions, exchange rate stability, easing inflationary pressures, and stronger external sector fundamentals.
The CBN noted that the economy maintained a positive trade balance during the period, while external reserves climbed to $48.88 billion, and the naira appreciated by 2.43% to N1,416.52/$ at the Nigerian Foreign Exchange Market.
What the report says
According to the report, foreign portfolio investment remained the overwhelming driver of capital importation during the month.
- The report read, “The economy recorded a higher inflow of capital during the review period, driven mainly by the significant increase in portfolio investment inflow.
- “A total capital inflow of US$3.52 billion was recorded in January 2026, compared with US$1.25 billion in the preceding month.
- “A disaggregation showed that inflow of foreign portfolio investment amounted to US$3.37 billion, a surge from the US$0.94 billion in December 2025, due to significantly higher inflows for the purchase of bonds, and money market instruments,” the report stated.
The inflows represented nearly 96% of total capital imported into Nigeria, reinforcing the growing attraction of the country’s fixed-income market to foreign investors seeking higher yields.
By contrast, foreign direct investment remained subdued. Direct investment inflows fell by 80% to just $30 million in January from $150 million in the preceding month, accounting for only 0.77% of total capital imported. Other investments, largely loans, also declined to $120 million from $160 million, representing 3.51% of total inflows.
The composition of capital inflows highlights the continued reliance on short-term portfolio funds rather than long-term productive investments, despite efforts by policymakers to attract greater foreign direct investment into key sectors of the economy.
Banking sector captures bulk of foreign capital
An analysis of capital importation by business activity showed that the banking sector remained the primary destination for foreign funds.
- The sector attracted 75.15% of total inflows during the review period, reflecting investors’ strong interest in financial assets and banking-related instruments. Financing activities followed with 22.20%, meaning the two sectors accounted for more than 97% of all capital imported into the country in January.
Meanwhile, the productive sectors received only a marginal share of total inflows. Production and manufacturing attracted 1.16%, while investments in shares accounted for 0.76%. Trading received 0.41%, agriculture 0.17%, and information technology services just 0.07%.
The distribution shows the concentration of foreign capital in financial markets rather than in sectors capable of generating long-term productive capacity, employment, and export growth.
US and UK account for nearly 87% of inflows
The United States and the United Kingdom remained the dominant sources of foreign capital into Nigeria during the month.
According to the CBN, the United States accounted for 46.25% of total capital inflows, while the United Kingdom contributed 40.57%. Combined, both countries supplied 86.82% of all foreign capital imported into Nigeria in January.
Other notable sources included Mauritius with 5.80%, South Africa with 3.21%, and the United Arab Emirates with 1.38%. France contributed 1.22%, while Belgium, Singapore, the Isle of Man, and Morocco collectively accounted for less than 1.2% of total inflows.
What you should know
Nairametrics earlier reported that Foreign direct investment (FDI) accounted for less than 4% of total capital imported into Nigeria in 2025, according to data from the capital importation report from the National Bureau of Statistics (NBS).
The data showed the country’s external capital inflows remained heavily tilted toward more mobile portfolio funds despite an improvement in absolute FDI volumes.
