Capital importation into Nigeria soared to $5.64 billion in the first quarter of 2025, marking a significant 67.12% increase compared to the $3.38 billion recorded in Q1 2024. This is according to the Nigeria Capital Importation Q1 2025 report released by the National Bureau of Statistics (NBS).
The figure also reflects a 10.86% quarter-on-quarter increase from the $5.09 billion reported in Q4 2024, signaling growing investor interest in Nigeria’s economy despite ongoing global uncertainties.
“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 report stated.
Portfolio Investments Dominate Capital Inflows
The surge was largely driven by portfolio investments, which accounted for a staggering 92.25% of total inflows, totaling $5.2 billion. This trend suggests that most foreign investors continue to favor liquid, short-term financial instruments such as stocks and bonds over long-term commitments.
Other investments which include trade credits, loans, and currency deposits came in at $311.17 million (5.52%), while Foreign Direct Investment (FDI), often viewed as a stronger indicator of long-term economic confidence, lagged behind with $126.29 million, making up just 2.24% of total capital inflows.
Banking Sector, UK Take the Lead
Among the sectors, banking attracted the most foreign capital, pulling in $3.13 billion, which represents 55.44% of the total capital imported. This was followed by the financing sector with $2.10 billion (37.18%) and the production/manufacturing sector with $129.92 million (2.30%).
In terms of source countries, the United Kingdom led the pack with $3.68 billion, accounting for 65.26% of total inflows. It was followed by South Africa with $501.29 million (8.88%) and Mauritius with $394.51 million (6.99%).
The dominance of the UK may be linked to renewed investor confidence following Nigeria’s forex market reforms, as well as policy engagements by British-Nigerian business councils and investment forums held in late 2024.
FCT, Lagos Dominate Destination States
Capital inflows were concentrated in just five states, with Abuja (FCT) and Lagos receiving the lion’s share. The FCT led with $3.05 billion (54.11%), followed by Lagos with $2.56 billion (45.44%). Other states included Ogun ($7.95 million), Oyo ($7.81 million), and Kaduna ($4.06 million).
This regional imbalance reflects the persistent concentration of economic activity and financial infrastructure in Nigeria’s two most prominent cities, underscoring the need for broader subnational investment strategies.
Top Banks Attracting Capital
On a bank-by-bank basis, Standard Chartered Bank Nigeria Ltd attracted the most capital with $2.10 billion, followed by Stanbic IBTC Bank Plc with $1.40 billion and Citibank Nigeria Limited with $1.05 billion.
Their dominance highlights the pivotal role played by international and multinational banks in facilitating cross-border investments into Nigeria.
What This Means for Nigeria
The increase in capital importation, particularly in portfolio investments, may offer short-term relief for Nigeria’s foreign reserves and the naira. However, analysts caution that overreliance on portfolio flows could expose the country to risks of sudden capital flight if investor sentiment shifts.
While the surge is encouraging, experts say Nigeria still needs to boost its FDI numbers by improving the ease of doing business, providing regulatory clarity, and investing in critical infrastructure to attract long-term investors.
Conclusion
The Q1 2025 data reflects a strong start to the year in terms of foreign capital inflows. However, sustained growth will depend on Nigeria’s ability to deepen investor confidence, diversify capital sources, and balance macroeconomic reforms with political stability.
