Foreign investment outflow from Nigeria’s stock market has outpaced inflow by 26.6% in February 2025, signaling a continued decline in foreign investor participation. According to data from the Nigerian Exchange (NGX), foreign investment outflow reached N24.60 billion in February, exceeding the inflow of N18.05 billion.
This marks a 46.3% decrease in foreign outflows compared to January 2025, which saw N45.85 billion in outflows. Conversely, foreign inflows dropped by 29.7%, from N25.66 billion in January to N18.05 billion in February.
As a result, the total foreign investment in the NGX decreased by 40.3%, falling from N71.51 billion in January to N42.65 billion in February 2025. The total value of transactions at the Exchange also saw a decline, down 16.07% from N607.05 billion in January to N509.47 billion in February.
Looking at the composition of these transactions, domestic investors dominated, accounting for 84% of the total transactions in February 2025, leaving foreign investors with a mere 16% share. This marks a shift from February 2024 when the balance between domestic and foreign investor participation was closer. Domestic transactions also decreased by 12.83% in February, falling from N535.64 billion in January to N466.82 billion.
Analysts attribute the dip in market activity to a growing preference among investors for debt securities, which offer attractive yields, making them a more appealing option than equities. This shift in investor preference has also been reflected in the performance of institutional versus retail investors. Institutional investors saw a slight decline of 5.92%, while retail investors experienced a more significant drop of 19.76% in their transactions.
Market analysts, such as those at InvestData Consulting, believe that the reduced participation in the stock market may be linked to the higher returns offered by fixed-income securities. David Adonri of Highcap Securities added that the higher foreign outflows indicate that investors are repatriating profits, which is a typical response to capital appreciation in stocks.
While acknowledging that the exit of foreign investors could slightly reduce the supply of foreign currency in the market, Adonri stressed that as long as domestic participation remains strong and macroeconomic indicators continue to improve, the overall impact on the economy would be minimal.
The data highlights an ongoing shift in Nigeria’s stock market, as foreign investors reduce their presence while domestic participation continues to play a dominant role.
