Nigeria recorded a significant surge in capital inflows in the first quarter of 2025, with total importation rising to $5.64 billion, up by 67.12% from $3.38 billion in the same period of 2024. The latest data from the National Bureau of Statistics (NBS) also shows a 10.86% increase compared to the $5.09 billion recorded in the fourth quarter of 2024.
According to the NBS Capital Importation Q1 2025 report, the sharp increase was largely driven by a spike in portfolio investments, which accounted for the bulk of the capital imported during the period.
“In Q1 2025, total capital importation into Nigeria stood at US$5,642.07 million, higher than US$3,376.01 million recorded in Q1 2024, indicating an increase of 67.12%. In comparison to the preceding quarter, capital importation increased by 10.86% from US$5,089.16 million in Q4 2024,” the NBS stated.
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Portfolio inflows dominate, FDI remains weak
Portfolio investment contributed $5.2 billion, representing 92.25% of the total capital inflow. Other investments, including loans and trade credits, followed with $311.17 million (5.52%), while Foreign Direct Investment (FDI) trailed significantly with just $126.29 million, only 2.24% of the total inflows.
This lopsided pattern has persisted in recent years, reflecting foreign investors’ hesitancy to commit long-term funds in Nigeria amid concerns over currency stability, regulatory uncertainty, and structural challenges. While portfolio inflows offer short-term relief for the country’s foreign reserves, analysts continue to warn that Nigeria needs more stable FDI to drive industrialization, job creation, and infrastructure development.
Banking, financing sectors remain most attractive
The banking sector attracted the largest portion of capital importation in Q1 2025, with $3.13 billion, accounting for 55.44% of total inflows. The financing sector followed with $2.1 billion (37.18%), while the production/manufacturing sector managed only $129.92 million (2.30%).
The dominance of banking and financing underscores investor appetite for short-term returns and financial instruments, rather than long-term bets on Nigeria’s industrial or productive base. Manufacturing, once touted as key to economic diversification, continues to attract a marginal share of capital.
UK remains Nigeria’s top capital source
Capital importation into Nigeria during the period came predominantly from the United Kingdom, which contributed $3.68 billion, amounting to 65.26% of total inflows. This was followed by South Africa ($501.29 million) and Mauritius ($394.51 million).
The UK’s position at the top reaffirms its status as a critical financial partner to Nigeria, especially for portfolio investors. The presence of Mauritius, a major offshore financial hub, also suggests some inflows may be routed through tax-friendly jurisdictions.
Abuja and Lagos dominate state-level inflows
Only five states recorded capital importation in Q1 2025, with Abuja (FCT) and Lagos State taking the lion’s share. The FCT attracted $3.05 billion, accounting for 54.11%, while Lagos received $2.56 billion (45.44%).
Ogun, Oyo, and Kaduna states collectively accounted for less than 1% of total inflows, highlighting the heavy concentration of capital in Nigeria’s political and commercial capitals. This pattern continues to raise concerns about regional imbalances in investment and development.
Standard Chartered, Stanbic IBTC lead capital recipients
The report also identified the financial institutions that received the highest capital inflows in Q1 2025. Standard Chartered Bank Nigeria Ltd topped the list with $2.10 billion, followed by Stanbic IBTC Bank PLC with $1.40 billion, and Citibank Nigeria Limited with $1.05 billion.
These banks play key roles as intermediaries for foreign capital entering the country and also reflect the preference of international investors for established, multinational banking institutions with strong global connections.
While the jump in capital importation provides a positive headline for the Nigerian economy, the underlying trends reflect deeper structural issues. The country remains heavily reliant on volatile portfolio inflows, while long-term productive investment remains weak. The continued weakness in FDI, combined with the heavy concentration of inflows in just two sectors and two states, underlines an uneven and fragile investment environment.
Economists warn that unless Nigeria addresses macroeconomic instability, forex market inefficiencies, and insecurity, particularly in industrial and agricultural zones, capital inflows will remain skewed and speculative.