Business
Investment Flow To Nigeria Drops By 70%
The National Bureau of Statistics (NBS) has said that Foreign Direct Investments (FDI) into Nigeria has dropped sharply by 70.06 per cent in three months.
This is according to ts data on the latest importation report, which indicated that the drop on quarter-on-quarter basis was from $421.88m recorded in the last quarter of 2024, to $126.29m in the first quarter of 2025.
The steep decline in FDI occurred despite an overall increase in capital importation into the country, indicating that foreign investors are favouring short-term, high-yield financial instruments over long-term, productive commitments in the Nigerian economy.
On a year-on-year basis, FDI posted a modest growth of 5.97 per cent compared to $119.18m recorded in the same period of 2024, but this marginal increase has done little to shift the broader trend of dwindling interest in long-term investment.
The data show that FDI made up only 2.24 per cent of total capital imported into the country in first quarter of 2025, down from 8.29 per cent in the preceding quarter and below the 3.53 per cent recorded in first quarter of 2024.
According to the NBS data, total capital importation rose to $5.64bn in first quarter of 2025, an increase from $5.09bn in last quarter of 2024 and $3.38bn in first quarter of 2024.
The figures reflect a growing disconnect between headline capital inflows and actual investment in sectors capable of driving economic growth.
It further revealed that the headline rise in capital importation might suggest renewed investor confidence, and that closer examination reveals that over 90 per cent of these inflows were directed into short-term money market instruments, such as government bonds and treasury bills, rather than equity or direct investments.
This trend, the report revealed, raises fresh concerns about the sustainability of Nigeria’s current investment profile, which remains heavily reliant on speculative flows that can exit the economy with little warning.
FDI, which is generally viewed as a vote of confidence in the host country’s long-term prospects, has been crowded out by short-term capital chasing quick returns in Nigeria’s high-yield debt market.
In its capital importation data, the NBS reported that the manufacturing sector attracted $129.92m in first quarter 2025, down from $191.92m in the corresponding quarter of 2024.
The sector’s share of total capital importation also fell from 5.68 per cent in first quarter 2024 to 2.30 per cent in first quarter 2025.
The manufacturing sector’s capacity to attract foreign investment has remained weak, and the 2023-2024 window saw multinationals exit with a harsh operating environment in the height of economic reforms introduced by President Bola Tinubu.
As the reforms weakened purchasing power and slowed consumption, manufacturers invested less.
Corlins Walter