Analysts: Nigeria’s Macro-economic Environment Favourable to Foreign Portfolio Investors

Nigeria's macroeconomic environment is currently highly favorable for foreign portfolio investors (FPIs), according to analysts. The National Bureau of Statistics (NBS) reported a significant increase in capital importation in the country, rising by 20% to $2.5 billion in the first quarter of 2025, the highest in 20 quarters.

FPIs dominated the inflow, accounting for 93% of the total. The surge in portfolio inflow was driven by opportunistic placements in money market instruments, treasury bills, bonds, and equities, offering attractive yields of up to 20%.

However, analysts cautioned that this "hot money" is sensitive to shifts in domestic monetary policy and global risk sentiment. Foreign direct investment (FDI) remained subdued, rising by only 1% to $7 million, reflecting low confidence in the economy due to insecurity, weak institutions, and bureaucratic inefficiencies.

The financial services and banking sectors attracted the most inflow, while FDI.