Portfolio Investors Drive Nigeria’s $10.37bn Capital Inflow Boom

Nigeria recorded a sharp increase in capital importation in the first quarter of 2026, with portfolio investors accounting for the overwhelming majority of inflows as total foreign capital entering the country rose to $10.37bn, according to the latest data released by the National Bureau of Statistics (NBS).

The NBS disclosed that total capital importation into Nigeria stood at $10.371bn in Q1 2026, representing an 83.83 per cent increase compared to the $5.642bn recorded in the corresponding period of 2025.

On a quarter-on-quarter basis, capital inflows also rose significantly by 60.97 per cent, from $6.443bn in Q4 2025, underscoring renewed investor appetite for Nigerian financial assets amid ongoing economic reforms and improving market conditions.

However, a closer look at the figures shows that the surge was driven almost entirely by portfolio investments, highlighting the continued dominance of short-term capital over long-term productive investments in the economy.

According to the report, Portfolio Investment accounted for $9.862bn, representing 95.09 per cent of total capital imported during the quarter. This was followed by Other Investments, which contributed $374.48m, or 3.61 per cent of total inflows.

In contrast, Foreign Direct Investment (FDI), widely regarded as a more stable indicator of investor confidence and economic sustainability, amounted to only $135.08m, accounting for a mere 1.30 per cent of total capital importation.

The data suggests that while foreign investors are increasingly attracted to Nigerian financial instruments, such as treasury bills, bonds and equities, the country continues to face challenges in attracting substantial long-term investments into critical sectors of the economy.

Analysts have often noted that portfolio investments can be highly sensitive to global market conditions and domestic economic uncertainties, making them more volatile than direct investments in factories, infrastructure and productive enterprises.

Sectoral analysis of the inflows revealed that the banking sector remained the biggest beneficiary of foreign capital during the quarter.

The sector attracted $7.55bn, representing 72.79 per cent of total capital imported into the country.

The financing sector followed with inflows valued at $2.429bn, accounting for 23.42 per cent, while the production and manufacturing sector received $152.27m, representing only 1.47 per cent of the total.

The relatively low share of manufacturing inflows has continued to raise concerns among economic observers who argue that sustainable economic growth requires stronger foreign investment in productive sectors capable of generating jobs, increasing exports and boosting industrial capacity.

On the sources of capital inflows, the United Kingdom maintained its position as Nigeria’s largest source of foreign capital, contributing $5.084bn, equivalent to 49.01 per cent of total inflows recorded during the quarter.

The United States ranked second with $3.184bn, representing 30.69 per cent, while the Republic of South Africa contributed $983.83m, accounting for 9.49 per cent of the total.

Together, the three countries accounted for nearly 90 per cent of all foreign capital imported into Nigeria during the review period.

The NBS report also highlighted the role of major financial institutions in facilitating the inflows.

Standard Chartered Bank Nigeria Limited emerged as the top recipient of foreign capital, handling $4.414bn, which represented 42.56 per cent of total capital importation.

It was followed by Stanbic IBTC Bank Plc, which received $2.779bn, accounting for 26.79 per cent, while Rand Merchant Bank handled $930.82m, representing 8.97 per cent.

The latest figures build on the growth recorded in the first quarter of 2025, when capital importation rose to $5.642bn from $3.376bn in the corresponding period of 2024, reflecting a 67.12 per cent increase.

During that period, portfolio investment also dominated capital inflows, accounting for 92.25 per cent of total importation, indicating that Nigeria’s reliance on short-term foreign capital has persisted over time.

The NBS explained that the capital importation data was compiled using information provided by the Central Bank of Nigeria (CBN).

According to the bureau, the figures capture fresh capital inflows reported by commercial banks and do not include other components of foreign direct investment, such as reinvested earnings.

The strong growth in capital importation is expected to provide support for Nigeria’s external reserves, exchange rate stability and liquidity conditions in the financial markets.

Nevertheless, the continued concentration of inflows in portfolio investments rather than direct investments may reinforce concerns about the quality and sustainability of foreign capital entering the economy, particularly as policymakers seek to attract investments that can drive industrialisation, job creation and long-term economic growth.

ENDS