By Ahmed Ahmed
Foreign direct investment (FDI) accounted for less than four percent of total capital imported into Nigeria in 2025, despite a sharp increase in overall inflows, according to data from the National Bureau of Statistics (NBS).
Total capital importation rose to $23.22 billion in 2025 from $12.32 billion in 2024, reflecting a strong rebound in foreign inflows. However, FDI contributed only $923.01 million, representing 3.97 percent of the total.
This compares with $674.71 million recorded in 2024, when FDI accounted for 5.48 percent, indicating that although FDI increased by $248.30 million year-on-year, its share declined as other investment categories expanded more rapidly.
Portfolio investment remained the dominant driver, rising to $19.74 billion from $8.38 billion in 2024 and accounting for 85.03 percent of total inflows, up from 68.00 percent in the previous year.
Quarterly data showed sustained dominance of portfolio flows, contributing 92.25 percent in Q1, 82.02 percent in Q2, 80.70 percent in Q3 and 85.14 percent in Q4.
In contrast, FDI remained subdued across the year, contributing 2.24 percent in Q1, 2.79 percent in Q2, 4.93 percent in Q3 and 5.55 percent in Q4, despite some improvement in the second half.
In nominal terms, portfolio inflows of $19.74 billion were more than 21 times higher than FDI, highlighting a significant imbalance in the composition of foreign capital entering the country.
A breakdown of FDI showed steady growth from $126.29 million in Q1 to $142.67 million in Q2, before rising to $296.25 million in Q3 and $357.80 million in Q4. The fourth quarter accounted for about 38.8 percent of total FDI, while the second half contributed roughly 70.9 percent.
Equity investment dominated FDI at $868.29 million, representing about 94.1 percent of total direct investment, while other capital rose to $54.72 million from $9.20 million in 2024.
Despite the increase in value, the data indicates that Nigeria’s capital inflows remain largely driven by short-term portfolio investments rather than long-term investments associated with business expansion and job creation.
Commenting on the global trend, the Chief Economist and Senior Vice President of the World Bank Group, Mr. Indermit Gill, warned that FDI is declining even as public debt rises.
“Yet, in recent years, governments have been busy erecting barriers to investment and trade when they should be deliberately taking them down. They will have to ditch that bad habit,” he said.
In response to evolving trends, the Federal Ministry of Industry, Trade, and Investment (FMITI) in its Outlook 2026 released in February, said that it would prioritise trade facilitation and stronger policy execution to sustain reform momentum and translate inflows into growth, exports and job creation.
