Foreign Direct Investment (FDI) into Nigeria rose sharply in the third quarter of 2025, reaching $720 million and marking the country’s strongest quarterly performance for the year, according to new data from the Central Bank of Nigeria (CBN).
Figures contained in the CBN’s Balance of Payments Highlights show that FDI inflows surged from just $90 million in the second quarter, representing a 700 per cent quarter-on-quarter increase. Compared with the same period in 2024, when inflows stood at $570 million, the latest figure reflects a year-on-year growth of about 26 per cent.
The CBN noted that direct investment liabilities — which track long-term foreign equity investments into the economy — amounted to $0.72 billion in the third quarter, underscoring a rebound in investor confidence after months of subdued inflows.
The improvement in FDI coincided with stronger external sector performance. Nigeria recorded a balance-of-payments surplus of $4.6 billion during the quarter, while external reserves climbed to $42.77 billion at the end of September, up from $37.81 billion three months earlier. The financial account also shifted to a net lending position, indicating increased accumulation of external assets.
While long-term investments strengthened, portfolio inflows moderated. Data showed that portfolio investment fell to $2.51 billion in Q3 from $5.28 billion in the previous quarter, suggesting a shift away from short-term capital toward more stable, long-term commitments.
Analysts view FDI as a more reliable indicator of investor sentiment because it reflects sustained equity participation rather than speculative flows. The rebound, though still modest relative to Nigeria’s potential, signals a break from the prolonged period of weak foreign investment.
However, challenges remain. The CBN reported continued repatriation of earnings by foreign-owned banks, contributing to a wider primary income deficit of $2.95 billion during the quarter. This indicates that profit outflows are still weighing on the current account despite improved inflows.
The rise in FDI came alongside a current account surplus of $3.42 billion, supported by higher crude oil and refined-product exports as well as steady diaspora remittances. Crude oil export earnings rose to $8.45 billion, while refined-product exports reached $2.29 billion, as fuel imports continued to decline.
Economists say the renewed interest from foreign investors may be linked to ongoing reforms in the foreign exchange market, adjustments in fiscal and monetary policy, and improved oil-sector performance. While the latest figures suggest growing confidence, sustaining the momentum will depend on continued policy stability, infrastructure improvements and progress in addressing long-standing structural challenges.
