LAGOS, Mar 26 – Nigeria recorded a nearly 90% surge in capital inflows in 2025, as foreign investors returned to its financial markets in search of high yields following recent economic reforms.
Total net capital inflows rose to $23.22 billion, up from $12.32 billion in 2024, according to official data.
The increase was driven primarily by foreign portfolio investment, which climbed to $19.74 billion from $8.38 billion, accounting for about 85% of total inflows. Investors were particularly attracted to high-yielding money-market instruments and government bonds.
Inflows into money-market instruments reached $13.83 billion, while bond investments surged nearly fivefold to $4.89 billion. Equity portfolio investment also rose to $2.10 billion.
In contrast, foreign direct investment saw only a modest increase to $923 million from $675 million, highlighting continued caution among investors toward long-term commitments in the economy.
Other forms of capital inflows, including loans categorized as “other investment,” declined to $2.55 billion from $3.27 billion.
The United Kingdom emerged as the largest source of inflows, contributing 58% of total capital, while Nigeria’s banking sector attracted the majority of investments.
Analysts note that while the surge reflects renewed investor confidence, it is largely driven by short-term yield-seeking behavior rather than long-term productive investment, leaving the economy exposed to potential volatility if global financial conditions shift.
