Nigeria’s macroeconomic stability has improved, but the country is still attracting more short-term portfolio funds than foreign direct investment (FDI) needed to expand productive capacity and create jobs, Prof. Bongo Adi of the Lagos Business School said.

Adi stated this in Apel Asset Limited’s H2 2026 Economic Outlook, titled ‘Navigating Stability, Reforms, and New Capital Flows in Nigeria’.

According to the report, foreign exchange unification has helped the naira to appreciate by 11.2 per cent year-on-year, while the premium between the official and parallel markets narrowed to 1.1 per cent from 2.7 per cent.

External reserves also rose to $52.25 billion as of August 13, a 17-year high, with Apel Asset projecting reserves of $53 billion by year-end.

Despite the improvement, the report said the quality of capital entering the economy remained a concern.

Capital importation rose 84 per cent year-on-year to $10.37 billion in the first quarter of 2026, but portfolio investment accounted for 95 per cent of the inflows.

FDI, which supports productive investment, fell 62 per cent to $135 million, representing only 1.3 per cent of total inflows.

“Investors are buying Nigerian assets, not building Nigerian capacity,” the report said, identifying the conversion of portfolio investment into FDI as a key economic priority over the next 18 months.

On inflation, Adi said the decline in headline inflation had not translated into lower pressure on households.

The report attributed the decline in headline inflation largely to a base effect from the high inflation recorded in July 2025, noting that the consumer price index still increased from 143 to 145.3 points.

It highlighted rising energy costs, saying diesel prices more than doubled from January to N3,277 per litre in May, while petrol prices increased 54 per cent to N1,596 per litre.