Nigeria recorded one of Africa’s strongest rebounds in foreign direct investment (FDI) in 2025, according to a new report by the Bashir Adeniyi Centre for International Trade and Investment (BACITI).
However, the country’s recovery remains heavily dependent on large oil and gas transactions rather than investments capable of creating broad-based jobs, manufacturing capacity and export growth.
The report, titled BACITI Economic Insight: Global FDI Rebounds, But Africa Is Losing Share, indicated that Nigeria’s inward FDI rose by 148.2 per cent to $4.005 billion in 2025 from $1.614 billion in 2024.
This makes it one of the continent’s strongest-performing investment destinations despite a broader decline in Africa’s foreign investment inflows.
BACITI, however, warned that the rebound should not be mistaken for a structural transformation of the economy, as most of the inflows were concentrated in oil, gas, refining, mining and related energy infrastructure through major corporate acquisitions.
According to the report, “Nigeria has regained some international investment momentum, but the composition of the rebound remains concentrated in energy and large transactions. It does not yet demonstrate a broad, sustained expansion of greenfield manufacturing, export-oriented production, technology transfer or domestic supplier participation.”
The report noted that Nigeria accounted for about 5.8 per cent of Africa’s FDI inflows but attracted only 0.25 per cent of global investment, underscoring how much work remains for the country to compete with leading investment destinations worldwide.
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Globally, FDI increased by six per cent to $1.624 trillion in 2025 after two consecutive years of decline.
The recovery, however, was driven mainly by developed economies, where inflows rose by 11 per cent, while Africa’s inflows fell by 26 per cent to $70 billion from $94 billion in 2024.
BACITI explained that Africa’s decline was partly due to the exceptionally high investment recorded by Egypt in 2024 through the Ras El-Hekma project, meaning the continent’s 2025 performance should not be viewed solely as a collapse in investor interest.
For Nigeria, the report showed the investment rebound was supported mainly by major transactions, including Renaissance Africa Energy’s acquisition of Shell’s onshore business and Huaxin Cement’s acquisition of Lafarge Africa.
While economically significant, BACITI stressed that acquisitions do not necessarily create the same level of new jobs, production capacity, supplier opportunities or technology transfer as greenfield investments.
“The central policy challenge is therefore not simply to increase FDI, but to change its quality, sectoral composition and domestic economic linkages,” the report said.
BACITI said Nigeria’s inward FDI stock increased to about $92.9 billion in 2025 from $86.2 billion a year earlier, but added that the country still lagged behind several global investment destinations.
It noted that Brazil attracted about $77 billion in FDI during the year, more than the entire African continent, while India received $39 billion, almost ten times Nigeria’s inflows.
Even within Africa, Nigeria’s inflows remained well below Egypt’s despite the sharp decline recorded by that country.
The report warned that Nigeria’s dependence on energy investments exposes the economy to commodity price cycles and the global energy transition.
“The appropriate response is not to reject petroleum investment. Nigeria should use energy FDI to finance and anchor wider value chains: gas-to-power, fertiliser, petrochemicals, plastics, industrial heat, marine services, engineering, fabrication and export manufacturing,” it stated.
The report also cautioned that Nigeria’s large domestic market alone would no longer be enough to attract investors.
“Nigeria’s large market is important, but market size alone will not compensate indefinitely for unreliable electricity, logistics bottlenecks, regulatory uncertainty or insecurity,” it said.
BACITI added that while recent foreign exchange, fiscal and petroleum sector reforms could improve investor confidence, investors would continue to judge Nigeria based on the overall cost of doing business, including electricity, logistics, financing, customs procedures and regulatory predictability.
The centre called for a shift from broad investment promotion to a coordinated investment, trade and industrial strategy focused on attracting investment-ready projects, strengthening domestic industries around energy investments, improving infrastructure and targeting strategic sectors such as agro-processing, pharmaceuticals, petrochemicals, renewable energy components, digital infrastructure and export manufacturing.
It also urged policymakers to judge investment success by its impact on the real economy rather than the headline value of capital inflows.
“Nigeria should move from measuring success predominantly by announced dollar inflows to measuring the economic capabilities those inflows create,” it stressed.
It added that the key indicators should include “new productive capacity, non-oil exports, electricity supplied to industry, skilled employment, local supplier contracts, domestic processing, technology transfer and reinvestment by existing investors.”
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X