Get Guardian on GoogleNigeria attracted $19.74 billion in foreign portfolio investment (FPI) in 2025, more than 21 times the $923 million recorded as foreign direct investment (FDI), highlighting the country’s continued difficulty in attracting long-term foreign capital despite a sharp rebound in overall inflows.
The figures, contained in the 2025 Consolidated National Investment Reports compiled by the Economic Community of West African States (ECOWAS), show that portfolio investment accounted for about 85 per cent of Nigeria’s total capital importation of $23.22 billion during the year, while FDI contributed less than four per cent.
The development underscores the imbalance in the country’s foreign capital profile, with investors showing stronger interest in financial instruments than in direct investments associated with establishing businesses, expanding productive capacity and creating jobs. FPIs are often regarded as hot money.
The ECOWAS compilation, prepared by its Directorate of Private Sector and Industry, brings together investment reports submitted by 10 member states: Benin, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Liberia, Nigeria, Senegal, Sierra Leone and Togo. The reports were presented to the Technical Committee of the ECOWAS Common Investment Market (ECIM) Council in Abidjan, Côte d’Ivoire, in April 2026.
Nigeria’s total capital importation rose from $12.32 billion in 2024 to $23.22 billion in 2025, according to National Bureau of Statistics data. Portfolio inflows increased from $8.38 billion to $19.74 billion over the same period, while FDI rose more modestly from $675 million to $923 million.
The increase in portfolio investment was driven largely by foreign investors’ participation in Nigeria’s financial markets, particularly money-market instruments and bonds, amid attractive domestic yields and ongoing economic reforms.
Although the return of foreign investors has boosted capital inflows and provided foreign exchange liquidity, the concentration of investment in portfolio instruments leaves the country exposed to possible reversals when market conditions change.
The figures also show that the increase in total capital importation has not translated into a comparable expansion in direct investment. Despite recording year-on-year growth, FDI represented only about four per cent of total inflows in 2025.
Nigeria’s investment environment has undergone several policy changes, including foreign exchange market reforms, efforts to improve the petroleum sector’s regulatory framework under the Petroleum Industry Act and the introduction of the National Single Window for Trade to simplify import and export procedures.
The Nigerian submission to the ECOWAS compilation also identifies investment facilitation efforts involving the Nigerian Investment Promotion Commission and the Forum of State Investment Promotion Agencies of Nigeria, as well as the Arbitration and Mediation Act 2023, among measures intended to improve the country’s investment climate.
However, infrastructure deficits, foreign exchange uncertainty, security concerns and difficulties in moving goods remain important challenges to attracting and retaining productive investment.
Nigeria’s experience contrasts with developments in Ghana, which recorded $2.62 billion in foreign direct investment in 2025, according to its annual investment report.
For Nigeria, the challenge is not merely to attract more foreign capital but to improve the proportion directed towards productive investment. The country’s large market offers significant opportunities, but translating financial-market interest into sustained investment in manufacturing, agriculture, infrastructure and other productive sectors will remain central to strengthening its position in the regional economy.
