The National Bureau of Statistics (NBS) reported that Nigeria attracted $10.37 billion in foreign capital during the first quarter of 2026, marking an 83.83% jump from the $5.64 billion recorded in the same period last year and a 60.97% rise from the $6.44 billion posted in the final quarter of 2025.
The figures signal a sharp rebound in investor confidence, driven largely by improved foreign exchange liquidity, elevated yields on government securities, and the Central Bank of Nigeria’s ongoing macroeconomic reforms.
As in previous quarters, Foreign Portfolio Investment (FPI) dominated the inflows, reflecting the preference for short-term, high-yield instruments such as bonds and money market securities.
Portfolio investments accounted for the vast majority of the total, continuing a trend where FPI often exceeds 85-92% of inflows.
Foreign Direct Investment (FDI) remained minimal, underscoring the challenges in attracting long-term, productive capital, despite government policy efforts.
The bulk of that interest was directed at short-term instruments including bonds and money market securities.
Analysts have warned that the heavy reliance on so-called “hot money” — while offering immediate relief to foreign exchange reserves exposes the economy to sharp reversals should global interest rates shift or domestic conditions weaken.
Where the money came from and where it went
The United Kingdom was the single largest source of inflows, maintaining a pattern consistent with historical data. South Africa, Mauritius, the United States, and the United Arab Emirates followed.
Within Nigeria, Abuja and Lagos absorbed the largest share of capital, with the Federal Capital Territory drawing investor interest in government-linked securities and Lagos benefiting from its position as the country’s commercial centre.
The banking, financial services, and production sector received the most attention from foreign investors.
The Q1 2026 result build on the strong momentum seen throughout 2025, when full-year capital importation reached approximately $23.21 billion — an 88% jump from 2024.
Analysts attribute the sustained inflows to FX market reforms, CBN interventions to clear backlogs, and attractive real returns on Nigerian assets amid moderated inflation.
Economist highlight that while the surge signals improved investor sentiment, the heavy reliance on portfolio flows calls for urgent measures to boost FDI. Long-term investments in manufacturing, infrastructure, and agriculture are critical for job creation, technology transfer, and sustainable economic growth.
Without a meaningful increase in long-term investment in manufacturing, infrastructure, and agriculture, the benefits for job creation, technology transfer, and sustainable growth will be limited.
However, diversifying the composition of capital flows will be key to building economic resilience.
Administrator and Writer
