CBN
FDI into Nigeria plunges 80% to $30m in January 2026 as investors flock to bonds, CBN report reveals
Foreign direct investment, FDI, into Nigeria plunged by 80 per cent in January 2026 as foreign investors increasingly channelled funds into bonds and money market instruments, despite a sharp rise in overall capital inflows, the latest Economic Report of the Central Bank of Nigeria has shown.
The report revealed that FDI fell to $30 million in January from $150 million in December 2025, while foreign portfolio investment surged to $3.37 billion from $940 million over the same period, showing investors’ preference for debt assets over long-term productive investments.
According to the CBN, “Direct investment fell by 80.0 per cent to $0.03 billion in the review period.” The apex bank, however, noted that total capital inflow into the economy rose significantly during the month.
“The economy recorded a higher inflow of capital during the review period, driven mainly by the significant increase in portfolio investment inflow,” the report stated.
Overall capital importation climbed to $3.52 billion in January 2026, compared with $1.25 billion recorded in December 2025, largely on the back of increased foreign participation in the domestic fixed-income market.
The report stated that foreign portfolio investment accounted for $3.37 billion of the total inflow.
“A disaggregation showed that inflow of foreign portfolio investment amounted to $3.37 billion, a surge from the $0.94 billion in December 2025, due to significantly higher inflows for the purchase of bonds and money market instruments,” the CBN said.
Further analysis showed that portfolio investment accounted for 95.72 per cent of total capital inflows during the review period, while direct investment contributed only 0.77 per cent. Other investment, consisting mainly of loans, accounted for 3.51 per cent of total inflows and declined to $120 million from $160 million in the preceding month.
The figures suggest that while foreign investors are returning to Nigeria’s financial markets, particularly attracted by high yields on fixed-income securities, appetite for long-term investments in factories, infrastructure, and other productive ventures remains subdued.
Sectoral analysis in the report showed that the banking industry was the biggest beneficiary of foreign capital inflows, attracting 75.15 per cent of the total funds imported into the economy in January.
Financing activities accounted for 22.20 per cent of total inflows, while production and manufacturing received just 1.16 per cent. Investments in shares accounted for 0.76 per cent, with trading and other sectors making up the balance.
The development came amid improved performance in Nigeria’s external sector. The CBN reported that the country recorded a stronger trade position during the review period, supported by higher export earnings and sustained capital inflows.
External reserves rose to $48.88 billion in January 2026, providing import cover of 8.93 months for goods and services.
The naira also appreciated by 2.43 per cent at the Nigerian Foreign Exchange Market to N1,416.52 per dollar from the level recorded in the preceding month.
The report suggests that although macroeconomic conditions and foreign exchange stability have encouraged increased foreign participation in Nigeria’s financial markets, investors continue to favour liquid debt instruments over long-term commitments in the real sector of the economy.
President Bola Tinubu earlier said Nigeria is on course to attract close to $20 billion in foreign direct investment in 2026 alone.
He attributed the figure to his administration’s systematic removal of regulatory bottlenecks, macroeconomic stabilisation, and transparency reforms.
Tinubu said, “Removing all the bottlenecks gives you the necessary incentives for direct foreign investment into the country. This year alone, I can beat my chest that Nigeria is attracting close to $20 billion in foreign direct investments.”
The foreign direct investment accounted for less than four per cent of total capital imported into Nigeria in 2025, despite a significant increase in overall foreign inflows.
Data from the National Bureau of Statistics indicated that total capital importation rose to $23.22 billion in 2025 from $12.32 billion recorded in 2024, reflecting a strong rise in foreign inflows during the year.
However, FDI contributed only $923.01 million, representing 3.97 per cent of the total. This compares with $674.71 million recorded in 2024, when FDI accounted for 5.48 per cent of total inflows, showing that although FDI grew by $248.30 million year on year, its share declined as other investment categories expanded at a faster pace.
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