Foreign portfolio investors drive Nigeria’s capital importation to $10.37bn in Q1

Foreign portfolio investors pumped $10.37 billion into Nigeria’s economy in the first quarter of 2026, marking one of the strongest quarterly capital inflows in recent years as improved foreign exchange market conditions and attractive yields on financial assets boosted investor appetite for Nigerian investments.

The latest Capital Importation Report released by the National Bureau of Statistics (NBS) showed that total capital importation surged by 83.83 percent year-on-year from $5.64 billion recorded in the corresponding period of 2025. Compared with the preceding quarter, inflows rose by 60.97 per cent from $6.44 billion in the fourth quarter of 2025.

According to the NBS, “In Q1 2026, total capital importation into Nigeria stood at US$10,371.90 million, higher than US$5,642.07 million recorded in Q1 2025, indicating an increase of 83.83 percent. In comparison to the preceding quarter, capital importation increased by 60.97 per cent from US$6,443.48 million in Q4 2025.”

The surge in inflows shows that foreign investors are increasingly returning to Nigeria’s financial markets following reforms aimed at improving liquidity in the foreign exchange market and restoring confidence in the economy.

However, the composition of the inflows highlights the continued dominance of short-term investments over long-term productive capital.

Portfolio investments accounted for $9.86 billion, representing 95.09 percent of total capital imported during the quarter. Foreign direct investment, which is typically associated with new factories, infrastructure projects, and job creation, contributed only $135.08 million or 1.3 percent of total inflows.

The NBS noted that “portfolio investment ranked top with $9,862.34 million, accounting for 95.09 percent, followed by Other Investment with $374.48 million, accounting for 3.61 percent. Foreign direct investment recorded the least with $135.08 million, representing 1.30 percent of total capital importation in Q1 2026. ”

Data from the report showed that the banking sector emerged as the biggest beneficiary of foreign capital inflows, attracting $7.55 billion, equivalent to nearly three-quarters of total capital imported into the country during the period.

“The banking sector recorded the highest inflow with $7,550.04 million, representing 72.79 percent of total capital imported in Q1 2026, followed by the financing sector, valued at $2,429.19 million (23.42 percent), and the production/manufacturing sector with $152.27 million (1.47 percent),” the report stated.

The concentration of inflows in the banking and financial services sectors reflects investor confidence in Nigeria’s financial markets, although economists have consistently argued that stronger foreign direct investment is needed to support sustainable economic growth and industrial expansion.

The United Kingdom remained Nigeria’s largest source of foreign capital during the quarter, accounting for almost half of all inflows.

According to the NBS, “Capital importation during the reference period originated largely from the United Kingdom with $5,083.76 million, representing 49.01 percent of the total capital imported. This was followed by the United States with $3,183.65 million (30.69 percent) and the Republic of South Africa with $983.83 million (9.49 percent).”

The report further showed that Standard Chartered Bank Nigeria facilitated the largest volume of foreign capital inflows into the economy, receiving $4.41 billion or 42.56 percent of the total capital imported. Stanbic IBTC Bank followed with $2.78 billion, while Rand Merchant Bank handled $930.82 million.