Foreign Direct Investment (FDI) inflows into Nigeria surged to $720 million in the third quarter of 2025, marking the country’s strongest quarterly performance this year, according to the Central Bank of Nigeria (CBN).
Data from the CBN’s Balance of Payments (BoP) Highlights show that FDI rose sharply from $90 million recorded in Q2 2025, representing a 700 per cent quarter-on-quarter increase. On a year-on-year basis, inflows also exceeded the $570 million recorded in Q3 2024, reflecting a 26.3 per cent growth.
The report indicated that Direct Investment liabilities which capture foreign investment into the Nigerian economy stood at $0.72 billion in Q3 2025, the highest level recorded so far this year.
“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,” the CBN stated.
The sharp rebound comes amid lingering concerns over weak investor confidence, elevated macroeconomic risks, and constrained capital inflows that have characterised recent years.
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CBN data further revealed that the rise in FDI coincided with improvements in Nigeria’s external sector. The country posted an overall balance-of-payments surplus of $4.60 billion in Q3 2025, while external reserves increased to $42.77 billion at the end of September 2025, up from $37.81 billion at the end of June.
The financial account also shifted to a net lending position of $0.32 billion, compared to net borrowing of $6.90 billion in Q2, indicating increased accumulation of external assets during the quarter.
According to the apex bank, movements in the financial account were driven by higher direct investment inflows, improved participation in domestically issued instruments earlier in the year, and increased reserve asset accumulation.
FDI is widely regarded as a stronger indicator of investor confidence because it reflects long-term equity participation and reinvested earnings, rather than short-term speculative flows. Although the inflows remain modest relative to Nigeria’s investment potential and historical performance, the Q3 outcome represents a notable shift from the subdued levels recorded over several quarters.
However, 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 Q3 2025. This trend underscores the persistent impact of profit outflows on the current account, despite the improvement in headline FDI figures.
The increase in FDI occurred during a quarter in which Nigeria recorded a current account surplus of $3.42 billion, supported largely by crude oil and refined-product exports 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 a continued decline in refined fuel imports.
These developments helped strengthen foreign exchange liquidity and boost reserve accumulation, key factors influencing investor appetite for long-term capital exposure.
(Nairametrics)