Nigeria saw a sharp rise in capital inflows in 2025, increasing by nearly 90% as foreign investors returned to its financial markets in search of high bond yields following recent economic reforms, Reuters reported.
Official data shows that net capital inflows from abroad climbed to $23.22 billion, up from $12.32 billion in 2024. This growth was largely driven by foreign portfolio investment, which surged to $19.74 billion from $8.38 billion and made up about 85% of total inflows.
Within this category, investments in money-market instruments rose significantly to $13.83 billion, while bond inflows jumped თითქმის fivefold to $4.89 billion. Equity portfolio investment also increased, reaching $2.10 billion.
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In contrast, foreign direct investment recorded only a modest rise, climbing to $923 million from $675 million in 2024, reflecting continued caution among investors toward long-term commitments.
Meanwhile, capital inflows classified as “other investment,” including loans, declined to $2.55 billion from $3.27 billion. The United Kingdom emerged as the largest source of inflows, contributing 58%, while the banking sector attracted the largest share of funds.
Analysts say the figures indicate that foreign investors are returning to Nigeria, but mainly to take advantage of high yields rather than to make long-term productive investments, leaving the economy exposed to changes in global financial conditions.
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Image Credit: CNBC Africa
