By RismadarVoice Media
December 31, 2025
Foreign direct investment (FDI) into Nigeria rose sharply to $720 million in the third quarter of 2025, representing a 700 per cent increase from the $90 million recorded in the second quarter of the year.
The surge was revealed in the Central Bank of Nigeria’s (CBN) Balance of Payments Highlights for the period, which showed a notable rebound in long-term capital inflows after several quarters of subdued investor confidence.
On a year-on-year basis, FDI inflows in Q3 2025 also exceeded the $570 million recorded in the corresponding quarter of 2024, indicating a 26.3 per cent increase.
According to the report, Direct Investment liabilities, which measure foreign direct investment into the economy, stood at $0.72 billion in the third quarter, making it the strongest FDI performance so far in 2025.
“Direct Investment into the economy recorded a much higher inflow of $0.72bn in Q3 2025 as against $0.09bn recorded in Q2 2025,” the apex bank stated.
The rebound in FDI contrasts with Nigeria’s recent experience of weak inflows driven by elevated macroeconomic risks, policy uncertainty and fragile investor confidence.
CBN data showed that improvement in the third quarter coincided with stronger external-sector indicators.
Nigeria recorded an overall balance of payments surplus of $4.60 billion, while external reserves rose to $42.77 billion at the end of September 2025, up from $37.81 billion at the end of June.
The financial account also switched to a net lending position of $0.32 billion, compared with a net borrowing of $6.90 billion in the second quarter, indicating increased accumulation of external assets during the period.
However, portfolio investment inflows declined to $2.51 billion in Q3 from $5.28 billion in Q2, suggesting a moderation in short-term capital flows even as longer-term equity-type investments strengthened.
According to the CBN, developments in the financial account reflected increased direct investment liabilities, improved participation in domestically issued instruments earlier in the year, higher reserve accumulation.
Although still modest relative to Nigeria’s economic potential and historical levels, the improvement in FDI marks a departure from the weak trend recorded over several quarters.
The report also highlighted continued repatriation of reinvested earnings by domestic banks on their foreign assets, contributing to a wider primary income deficit of $2.95 billion in the third quarter.
This indicates that profit outflows by foreign investors continue to weigh on the current account despite stronger FDI inflows.
Nigeria nonetheless recorded a current account surplus of $3.42 billion in Q3 2025, driven largely by higher 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 apex bank added that declining refined-fuel imports also supported foreign exchange liquidity and reserve accumulation.
Nigeria has struggled with structurally weak FDI inflows in recent years due to currency volatility, infrastructure deficits, security concerns, policy inconsistencies.
Earlier in 2025, foreign direct investment fell by 19 per cent to $250 million in the first quarter from $310 million in the preceding quarter.
Analysts say the strong third-quarter performance points to a renewed risk appetite among foreign investors, supported by exchange rate reforms, ongoing fiscal, monetary policy adjustments and improved oil-sector earnings.
