The National Bureau of Statistics (NBS) has released the Q1 2025 Capital Importation Report.
In the report released on Tuesday, Nigeria saw a significant resurgence in capital importation in the first quarter of 2025, signalling renewed investor confidence and increased appetite for short-term gains.
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EKO HOT BLOG breaks down the data and what it reveals about the country’s economic climate.
Capital inflows jump 67% year-on-year
Total capital importation stood at US$5.64 billion in Q1 2025, a 67.12% increase compared to Q1 2024 and a 10.86% rise over Q4 2024. This rebound suggests that investors are cautiously returning after years of volatility driven by currency uncertainty, political risk, and global monetary tightening.
Yet, a closer look shows this capital is far from permanent. Nigeria’s economy is still struggling to attract long-term Foreign Direct Investment (FDI), and the vast majority of inflows were hot money: quick capital with no guarantees of staying.
Portfolio investment dominates, FDI remains negligible
Portfolio investment accounted for a staggering 92.25% of all inflows, totaling US$5.20 billion. In contrast, FDI was only US$126.29 million, or 2.24% of the total. This imbalance reflects investors’ preference for assets that can be easily exited, typically in the form of government bonds or equities, over commitments to brick-and-mortar ventures like factories, infrastructure, or new businesses.
This trend is concerning for a country of over 200 million people that needs long-term capital to stimulate jobs, technology transfer, and productivity growth.
Banking and financing sectors absorb the bulk
The banking sector attracted the most capital, US$3.13 billion, over 55% of the total. The financing sector followed with US$2.10 billion (37%). Together, they absorbed more than 90% of the inflows, reinforcing the pattern that investors are routing money through financial instruments and institutions rather than into productive sectors of the economy.
Sectors critical to industrial growth, like production/manufacturing (2.30%), telecommunications (1.43%), and shares (2.04%), saw minimal investment.
The lack of meaningful capital in these sectors marks the uphill battle Nigeria faces in its drive for economic diversification.
The UK leads capital origin, Abuja tops destination
The United Kingdom emerged as Nigeria’s leading source of capital, providing US$3.68 billion, 65% of total inflows. This is not surprising given the UK’s historic financial ties to Nigeria and London’s role as a global financial hub.
Other major contributors included South Africa, Mauritius, the United States, and the UAE, indicating a relatively narrow set of international capital sources.
On the destination side, Abuja (FCT) narrowly edged out Lagos, attracting US$3.05 billion (54.11%) compared to Lagos’ US$2.56 billion (45.44%). This trend may reflect the federal capital’s appeal for government-related deals or large corporate placements but could also point to a growing disconnect between political and commercial capitals.
Banks are key gateways for capital
Among financial institutions, Standard Chartered Bank Nigeria Ltd received the highest capital inflow, US$2.10 billion (37.29%). Stanbic IBTC and Citibank Nigeria followed, showing that multinational and well-established banks continue to serve as critical conduits for foreign capital. Local giants like Access Bank also featured but with comparatively smaller shares.
This bank-led structure may ensure better capital control and compliance, but it also raises questions about equitable access to investment capital for startups, SMEs, and subnational economies.
Bottom line: Big numbers, but short-term focus
While the surge in capital importation is a welcome sign, the heavy skew toward portfolio investments and financial sectors suggests Nigeria is not yet attracting the type of capital that drives sustainable development. With FDI at historic lows, sectors like manufacturing, tech, and telecoms remain underfunded.
FURTHER READING
To shift this trend, Nigeria will need to offer deeper reforms in ease of doing business, currency stability, judicial efficiency, and power infrastructure. Until then, capital may keep flowing, but only where it can flow back out just as fast.
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and critical insight on trending issues in Lagos and other parts of Nigeria.
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