Rising investor confidence and high returns drove foreign investments into Nigeria by 67.12 percent in the first quarter (Q1) of 2025, the National Bureau of Statistics (NBS) said.
Nigeria recorded total capital importation, also known as foreign investments, of $5.642 billion in Q1 of 2025. This was 67.12 percent higher than $3.376 billion recorded in the corresponding period of 2024 and 10.87 percent higher than $5. 089 billion recorded in the fourth quarter (Q4) of 2024.
Of the total, portfolio investment ranked tops with $5.204 billion, representing 92.23 percent of the total.
Portfolio investment was followed by other investment which brought in $311.17 million and foreign direct investment which imported $126.29 million capital into the economy.
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The banking sector recorded the highest inflows of $3.127 billion, representing 55.44 percent of total capital imported in Q1 of 2025.It was followed by the finance sector, which brought in $2.097 billion (37.18 percent), and production/manufacturing sector with $129.92 million (2.30 percent).
The report showed that capital importation during the reference period originated largely from the United Kingdom which reported $3.681 billion inflows, representing 65.26 percent of the total capital imported.
This was followed by the Republic of South Africa with $501.29 million (8.88 percent) and Mauritius with $394.51 million (6.99 percent).
Out of the five states that recorded capital importation during the quarter, Abuja (FCT) remained the top destination with $3.047 billion, accounting for 54.11 percent of the total capital imported.
Lagos State followed with $2.564 billion (45.44 percent), and Ogun state with $7.95million (0.14 percent). Others were Oyo and Kaduna States with $7.81 million and 4.06 million respectively.
Standard Chartered Bank Nigeria Ltd received the highest capital importation into Nigeria in Q1 of 2025 with $2.103 billion, followed by Stanbic IBTC Bank Plc with $1.398 billion and Citibank
Nigeria Limited with $1.052 billion.
What drove investments
Gbolahan Ologunro, a portfolio manager at FBNQuest, said that the high interest rate at the time drove the foreign portfolio investment (FPI).
“CBN was aggressive with open market operations (OMO) bills at the time to support FPIs. T-Bills and bonds were also in the 20 percent region, which was reasonable for carry trade,” Ologunro added.
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Olaolu Boboye, head of research at CardinalStone, said policies from the Central Bank of Nigeria (CBN) have become clearer, noting that the bank appears to be focused on inflation reduction and FX stability.
He further said that this has restored confidence in the country.
“Before now, investors were worried about FX movement because at the time we operated a pegged system.
“The CBN also used OMO to attract FPIs. OMO was trading at a premium to NT-bills, and what that signalled was that investors could get a 26 percent yield on their investment. With FX stability, it meant that the risk of return on investment being lower has reduced materially,” Boboye said
He said compared to other African countries, Nigeria has a better carry trade after adjusting for currency movement.
