Nigeria’s Capital Inflows Surge 93.71% to $23.40bn in 2025 as FX Reforms Boost Investor Confidence
Portfolio investment dominates inflows; the United Kingdom remains the largest source; outflows also nearly double to $21.12bn.
Nigeria’s capital importation nearly doubled in 2025, rising by 93.71 per cent to US$23.40 billion, from US$12.08 billion in 2024, according to the latest data from the Central Bank of Nigeria (CBN).
The sharp increase has been attributed to gains from ongoing reforms in the foreign exchange market, particularly renewed investor confidence and competitive returns in the domestic financial market.
Why capital inflow matters for Nigeria
Capital inflow is critical for economies like Nigeria’s for several reasons. It supplies foreign exchange that helps stabilise the naira and shore up external reserves, easing pressure on the CBN’s efforts to maintain FX market liquidity.
It also provides financing for government and private-sector borrowing needs at a time when domestic capital is scarce relative to the size of Nigeria’s infrastructure and development gaps.
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For businesses, inflows, particularly foreign direct investments, can translate into new production capacity, job creation and technology transfer, though the data above shows this component remains small relative to portfolio flows.
Portfolio investment, while easier to attract in the short term through competitive interest rates, is also more volatile and can reverse quickly if global risk sentiment shifts or domestic yields become less attractive, a dynamic that makes the composition of inflows, and not just the headline figure, an important signal for policymakers and investors alike
Portfolio investment drives the surge.
A breakdown by type of investment showed that portfolio investment accounted for the lion’s share of inflows, at US$19.86 billion, or 84.85 per cent of the total.
Within that, purchases of money market instruments alone amounted to US$13.94 billion (59.58% of total inflows), while bonds accounted for US$4.89 billion (20.91%) and equities US$1.02 billion (4.37%).
Other investment inflows stood at US$2.62 billion, or 11.20 per cent of the total, of which loans made up US$2.55 billion (10.91%). Other claims contributed US$0.04 billion (0.18%), trade credits US$0.02 billion (0.08%), and currency and deposits a marginal US$0.01 billion (0.02%).
Foreign Direct Investment (FDI) — made up entirely of FDI equity — trailed at US$0.92 billion, representing just 3.95 per cent of total capital importation, underscoring the extent to which the inflow surge was driven by shorter-term portfolio capital rather than long-term direct investment.
The UK dominates as a source of funds.
By country of origin, the United Kingdom was the dominant source of capital, accounting for US$12.31 billion, or 52.59 per cent of total inflows. The United States followed at US$3.07 billion (13.11%), South Africa at US$2.84 billion (12.12%), and Mauritius at US$1.86 billion (7.93%), with other countries making up the balance.
Banking sector, Lagos lead recipients
Sectoral data showed that banking and financing sectors together absorbed 87.29 per cent of total capital inflows. The banking sector alone received US$13.63 billion (58.25%), while the financing sector accounted for US$6.80 billion (29.04%).
By destination, Lagos State remained the overwhelming preferred entry point for capital, receiving US$16.77 billion, or 71.65 per cent of the total, followed by the Federal Capital Territory, Abuja, at US$6.59 billion (28.16%). Other states shared the remaining balance — a distribution that underscores the continued concentration of investment activity in Nigeria’s commercial and political capitals.
Outflows also climb sharply.
Aggregate capital outflow also rose significantly, more tbalance—ag to US$21.12 billion from US$9.89 billion in 2024.
Capital transfers accounted for the largest share of outflows, rising to US$13.70 billion (64.87% of total) from US$5.21 billion the previous year. Loan repayments increased to US$6.07 billion (28.74%), up from US$3.10 billion in 2024, while repatriation of dividends rose by 83.56 per cent to US$1.34 billion (6.34%). Other outflows made up the balance.
With inflows of US$23.40 billion against outflows of US$21.12 billion, Nigeria recorded a net capital position of roughly US$2.28 billion for the year — a margin analysts may point to as evidence that, despite the sharp rise in outflows, the country is still attracting more capital than it is losing.
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.