Nigeria’s Capital Inflows Jump 90% in 2025 as Foreign Investors Chase High Returns

LAGOS, March 26 (Reuters) – Capital inflows into Nigeria jumped nearly 90% in 2025, driven ​overwhelmingly by foreign portfolio investment as investors ‌returned to local financial markets to chase high bond yields after economic reforms.

Net capital invested from ​abroad rose to $23.22 billion from $12.32 billion in ​2024, official data shows.

The increase was led ⁠by foreign portfolio investment, which surged ​to $19.74 billion from $8.38 billion, accounting for about 85% ​of total inflows.

Among the main categories of investment, inflows into money‑market instruments climbed to $13.83 billion, while bond ​inflows jumped nearly fivefold to $4.89 billion. Equity ​portfolio investment rose to $2.10 billion.

By contrast, foreign direct investment increased ‌only ⁠modestly to $923 million, up from $675 million in 2024, underscoring persistent investor caution over long‑term commitments.

Capital inflows categorised as “other investment”, including loans, ​fell to $2.55 billion ​from $3.27 billion. ⁠The United Kingdom was the largest source of inflows, accounting for ​58%, while the banking sector received ​the ⁠biggest share.

Analysts say the data shows foreign investors are trading Nigeria again, but largely for ⁠yield ​rather than long‑term productive ​investment, leaving the economy vulnerable to shifts in global financial ​conditions.