Nigeria’s foreign direct investment (FDI) inflows surged to $720 million in the third quarter of 2025, marking a sharp rebound from the $90 million recorded in Q2 2025 — a quarter-on-quarter increase of about 700 per cent.
The figures are contained in the Central Bank of Nigeria’s (CBN) Balance of Payments (BoP) Highlights for the period. On a year-on-year basis, FDI inflows were also higher than the $570 million recorded in Q3 2024, representing a 26.3 per cent increase.
CBN data shows that Direct Investment liabilities, which capture FDI inflows into the Nigerian economy, stood at $0.72 billion in Q3 2025, making it the strongest FDI performance recorded so far in 2025. According to the report, “Direct Investment (DI) into the economy recorded a much higher inflow of US$0.72 billion in Q3 2025 as against US$0.09 billion recorded in Q2 2025.”
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The rebound comes after several quarters of weak foreign investment, driven by concerns over investor confidence, macroeconomic risks, and constrained capital inflows.
The surge in FDI coincided with improvements across key external-sector indicators. Nigeria recorded an overall balance-of-payments surplus of $4.60 billion in Q3 2025, while external reserves rose to $42.77 billion at the end of September, up from $37.81 billion at the end of June 2025.
The financial account also swung to a net lending position of $0.32 billion, reversing a net borrowing position of $6.90 billion in Q2, an indication that the country accumulated more external assets during the quarter.
Meanwhile, portfolio investment inflows declined to $2.51 billion in Q3, compared with $5.28 billion in Q2 2025, suggesting a slowdown in short-term capital movements even as longer-term equity investments strengthened.
The CBN attributed movements in the financial account to higher direct investment inflows, improved participation in domestically issued instruments earlier in the year, and increased reserve asset accumulation. FDI is generally viewed as a stronger measure of investor confidence because it reflects long-term equity participation and reinvestment of earnings rather than speculative capital flows.
Although FDI inflows remain modest relative to Nigeria’s investment potential and historical levels, the strong Q3 performance marks a clear shift from the subdued inflows recorded over multiple quarters.
However, the data also shows continued repatriation of reinvested earnings by domestic banks on their foreign assets, which contributed to a wider primary income deficit of $2.95 billion in Q3 2025. This indicates that profit outflows by foreign-owned entities continue to weigh on the current account despite the improvement in headline FDI figures.
The improvement in FDI occurred in a quarter when Nigeria also posted a current account surplus of $3.42 billion, largely driven by stronger crude oil and refined-product export earnings, as well as steady diaspora remittances. Crude oil export receipts rose to $8.45 billion, while refined-product exports increased to $2.29 billion. The CBN also noted that refined-fuel imports continued to decline.
These trends supported foreign exchange liquidity and reserve accumulation, both of which are critical to sustaining investor interest in long-term capital exposure.
Nigeria has faced structurally weak FDI inflows in recent years due to currency instability, policy uncertainty, infrastructure gaps, and security challenges. Earlier data showed that FDI inflows declined by 19 per cent to $250 million in Q1 2025, down from $310 million in the preceding quarter.
Against this backdrop, the sharp rise in Q3 inflows points to a renewed risk appetite among foreign investors, likely supported by FX-market reforms, ongoing fiscal and monetary policy adjustments, and stronger earnings from the oil sector.
