Nigeria's foreign direct investment falls amid surge in portfolio capital inflows

Foreign Direct Investment (FDI) to Nigeria dropped to $135.08 million in Q1 2026, a steep decline from $357.80 million recorded in the previous quarter. At the same time, total capital importation rose sharply to $10.37 billion, up from $6.44 billion in Q4 2025 and $5.64 billion in the same period a year earlier.

Portfolio investment dominated the inflows, reaching $9.86 billion (about 95 % of total capital imported). The United Kingdom was the largest source with $5.08 billion, followed by the United States at $3.18 billion and South Africa at $0.98 billion. The banking sector attracted $7.55 billion, roughly 73 % of all capital, while finance and manufacturing received much smaller shares.

Fitch Ratings noted that recent Central Bank of Nigeria reforms and naira liberalisation have boosted foreign‑currency market turnover and liquidity, but the withdrawal of regulatory forbearance has exposed higher loan‑impairment ratios. FDI accounted for only 1.3 % of the total inflows, underscoring a reliance on short‑term financial assets rather than long‑term productive investment. Policymakers intend to continue reforms to improve the investment climate and will monitor future capital‑import reports for signs of FDI recovery.