FDI rises in Q3 as Nigeria attracts $720m
File: CBN Building
Foreign direct investment into Nigeria jumped to $720m in the third quarter of 2025, up sharply from $90m in the previous quarter.
This represents a 700 per cent increase quarter-on-quarter, according to the Central Bank of Nigeria’s Balance of Payments Highlights for the period.
On a year-on-year basis, the inflow was also higher than the $570m posted in the third quarter of 2024, indicating a 26.3 per cent rise.
The report stated that Direct Investment liabilities, which capture foreign direct investment into the economy, stood at $0.72bn in the third quarter of the year, making it the strongest quarter for FDI so far in 2025.
It said, “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 rebound in FDI contrasts with recent years of weak investor confidence, elevated macro-economic risks and subdued capital inflows.
The central bank data showed that the improvement in the third quarter coincided with firmer external-sector indicators. Nigeria posted an overall balance of payments surplus of $4.60bn, while external reserves rose to $42.77bn as of the end of September 2025 from $37.81bn at the end of June 2025.
The financial account switched to a net lending position of $0.32bn from a net borrowing of $6.90bn in the second quarter, suggesting that the country accumulated more external assets during the period.
However, portfolio investment inflows fell to $2.51bn in the third quarter compared with $5.28bn in the second quarter, indicating that while short-term capital moderated, longer-term equity-type inflows strengthened.
According to the CBN, broader movements in the financial account reflected increased direct investment liabilities, improved participation in domestically issued instruments earlier in the year and higher reserve accumulation.
Although still modest compared with Nigeria’s potential and historic levels, the return to higher FDI inflows marks a shift from the weak trend seen over multiple quarters.
The report also showed continued repatriation of reinvested earnings by domestic banks on their foreign assets, contributing to a wider primary income debit of $2.95bn in the third quarter.
This indicates that profit outflows by foreign investors continue to weigh on the current account despite the headline improvement in FDI. Nigeria recorded a current account surplus of $3.42bn in the quarter, driven mainly by crude oil and refined-product export earnings and steady diaspora remittances.
Crude oil export receipts rose to $8.45bn, while refined-product exports increased to $2.29bn. The apex bank added that refined-fuel imports continued to decline, helping foreign exchange liquidity and reserve accretion.
Nigeria has faced structurally weak FDI inflows in recent years due to currency instability, policy uncertainty, infrastructure gaps and security concerns. Earlier this year, it was reported that foreign direct investment fell by 19 per cent to $250m in the first quarter of 2025 from $310m in the previous quarter.
The sharp rise in the third quarter suggests renewed risk appetite among foreign investors, helped by exchange-rate reforms, ongoing fiscal and monetary policy adjustments and higher oil-sector earnings.
