…As low FDI raises growth concerns
Portfolio investors pushed capital importation into Nigeria to $10.37 billion in the first quarter of the year, strengthening foreign-exchange liquidity and investor confidence as authorities press ahead with economic reforms, according to data released on Wednesday by the National Bureau of Statistics (NBS).
While inflows have helped stabilise Nigeria’s external position, analysts warn that the composition of the capital—dominated by portfolio rather than direct investments—poses risks to long-term growth and job creation.
The NBS, in its Capital Importation Report for the first quarter of 2026, said total capital inflows stood at $10.37 billion between January and March, representing an 83.83 per cent increase from the $5.64 billion recorded in the corresponding period of 2025.
The figure also showed a 60.97 per cent rise compared with the $6.44 billion recorded in the fourth quarter of 2025.
A breakdown of inflows revealed that portfolio investment remained the dominant source of foreign capital, accounting for $9.86 billion, or 95.09 per cent, of total capital imported during the quarter.
Other investments, including loans and trade credits, amounted to $374.48 million, representing 3.61 per cent of total inflows.
Foreign Direct Investment (FDI), often regarded as the most stable form of capital inflow because of its long-term nature, contributed the least at $135.08 million, accounting for just 1.30 per cent of total capital importation.
The banking sector attracted the largest share of the capital inflows during the review period, receiving $7.55 billion or 72.79 per cent of the total.
The financing sector recorded inflows of $2.43 billion, representing 23.42 per cent, while the production and manufacturing sector recorded inflows of $152.27 million, accounting for 1.47 per cent.
The report also highlighted the major source countries of the imported capital.
The United Kingdom emerged as the largest source of capital inflows into Nigeria during the quarter, accounting for $5.08 billion or 49.01 per cent of the total.
The United States ranked second with inflows of $3.18 billion, representing 30.69 per cent, while the Republic of South Africa contributed $983.83 million, accounting for 9.49 per cent.
Among financial institutions handling inflows, Standard Chartered Bank Nigeria Limited recorded the highest volume of capital importation, receiving $4.41 billion, or 42.56 per cent of the total.
Stanbic IBTC Bank Plc followed with $2.78 billion, representing 26.79 per cent, while Rand Merchant Bank accounted for $930.82 million or 8.97 per cent of total capital imported during the quarter.
The latest figures indicate sustained foreign investor interest in Nigeria’s financial markets, particularly in portfolio assets, amid ongoing economic reforms and efforts to improve macroeconomic stability.
However, the relatively low level of foreign direct investment compared to portfolio inflows underscores the challenge of attracting long-term productive investments into key sectors of the economy.
Some experts believe that while rising capital inflows are positive for foreign exchange liquidity and investor confidence, greater emphasis on attracting direct investment into manufacturing, infrastructure, and other productive sectors will be critical for achieving sustainable economic growth and job creation.
