Portfolio inflows dominate as NBS data shows renewed investor appetite, but long-term FDI remains subdued….
The United Kingdom accounted for the largest share of foreign capital inflows into Nigeria in the third quarter of 2025, according to newly released data from the National Bureau of Statistics (NBS).
Capital importation reports for Q2 and Q3 2025 show that inflows from the UK reached $2.94 billion, representing 48.80 percent of total capital imported during the period nearly half of all foreign funds recorded.
The United States ranked second, contributing $950.47 million (15.80 percent), followed by the Republic of South Africa with $773.95 million (12.87 percent). Other notable sources included Mauritius, which accounted for $451.46 million, and the Netherlands with $282.90 million.
The NBS noted that the figures sourced from the Central Bank of Nigeria reflect fresh capital entering the country through the banking system. The data excludes other components of foreign direct investment, such as reinvested earnings, focusing strictly on recorded capital inflows.
Portfolio Flows Drive the Rebound
The sharp rebound in Q3 capital importation signals renewed foreign investor confidence, but analysts say the composition of the inflows tells a more nuanced story.
Much of the surge was driven by short-term portfolio investments in money market instruments and government bonds, rather than long-term, productive investments in sectors such as manufacturing or infrastructure.
While portfolio flows provide liquidity support and can stabilise foreign exchange markets, they are generally more volatile and sensitive to global interest rate shifts and risk sentiment.
Long-Term Investment Still Lagging
Economists caution that the relatively small share of foreign direct investment (FDI) within the broader capital importation mix suggests that long-term capital commitments remain modest.
This imbalance highlights a key challenge for policymakers: converting Nigeria’s growing attractiveness to short-term investors into sustained, productive investment capable of driving job creation, industrial expansion and economic diversification.
The Q3 figures underscore Nigeria’s renewed appeal in global capital markets but they also reinforce the need for structural reforms, regulatory stability and investment-friendly policies that can attract durable, long-horizon capital.
For now, the UK’s dominant position in Nigeria’s capital inflows reflects strong financial linkages and investor exposure but whether that momentum translates into deeper economic transformation remains the bigger question.
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