Foreign Direct Investment (FDI) inflows into Nigeria recorded a dramatic rebound in the third quarter of 2025, rising to $720 million from $90 million in the preceding quarter, a 700 per cent quarter-on-quarter increase, according to the Central Bank of Nigeria (CBN).
The surge is detailed in the CBN’s Balance of Payments (BoP) Highlights for the third quarter of 2025, which also shows that FDI inflows were 26.3 per cent higher year-on-year, compared with the $570 million recorded in the third quarter of 2024.
According to the report, Direct Investment (DI) liabilities, which capture foreign direct investment inflows into the economy, stood at $0.72 billion in the third quarter of 2025, making it the strongest quarterly FDI performance recorded so far this year.
“Direct Investment (DI) into the economy recorded a much higher inflow of US$0.72 billion in third quarter of 2025 as against US$0.09 billion recorded in the second quarter of 2025,” the apex bank stated.
The rebound comes amid longstanding concerns over weak investor confidence, heightened macroeconomic risks, policy uncertainty, and tight capital inflows that have weighed on Nigeria’s investment profile in recent years.
Analysts say the third quarter outcome represents a notable break from the subdued FDI trend that has dominated the country’s external sector across several quarters.
CBN data further indicate that the improvement in FDI coincided with stronger external-sector fundamentals.
Nigeria posted an overall balance-of-payments surplus of $4.60 billion during the quarter, while external reserves climbed to $42.77 billion at the end of September 2025, up from $37.81 billion as of end-June.
While long-term capital inflows strengthened, the report shows that portfolio investment inflows moderated, declining to $2.51 billion in the third quarter from $5.28 billion in the second quarter of 2025.
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Economists interpret this as a sign that short-term, speculative capital eased, even as longer-term, equity-based investments gained traction.
A Lagos-based investment analyst described the development as significant, noting that “FDI is a more reliable indicator of investor confidence because it reflects long-term commitment and reinvestment, unlike portfolio flows that can reverse quickly. The third quarter numbers suggest foreign investors are beginning to reassess Nigeria’s risk profile.”
Despite the sharp rise, analysts caution that Nigeria’s FDI inflows remain modest relative to the size of the economy and its long-term investment needs.
“A 700 per cent increase is impressive, but $720 million is still far below what Nigeria requires to address its infrastructure and industrial financing gaps,” said an economist at a local research firm. “The sustainability of reforms will determine whether this momentum can be maintained.”
Economists say these developments supported foreign exchange liquidity and reserve accumulation, both of which are critical determinants of foreign investors’ appetite for long-term capital exposure.
“Improved forex liquidity, higher reserves, and relative stability in the external sector are sending positive signals to investors,” a macroeconomic analyst said. “These are essential for attracting sustainable FDI.”
Nigeria has grappled with structurally weak FDI inflows in recent years due to currency instability, infrastructure constraints, security challenges, and policy inconsistency.
Earlier data showed that FDI inflows fell by 19 per cent to $250 million in Q1 2025, down from $310 million in the previous quarter.