Nigeria's Capital Flow Structure Exposes Economic Risks

The Centre for the Promotion of Private Enterprise (CPPE) issued a policy brief on February 22, 2026, highlighting that Nigeria's current capital flow structure poses significant risks to the economy, despite a reported total capital inflow of $6.01 billion in Q3 2025, marking a 380% year-on-year increase. This rebound reflects improved investor confidence following macroeconomic reforms, including foreign exchange market liberalization and tighter monetary policies.

However, CPPE cautions that without faster structural reforms, the rebound may be fragile, as 80% of the inflow was driven by portfolio investments, with foreign direct investment (FDI) contributing less than 5%. The organization emphasizes that portfolio flows are inherently volatile and sensitive to global interest rates and investor sentiment.

The financial sector attracted the largest share of inflows, receiving $3.14 billion, while the manufacturing sector accounted for $261.35 million. CPPE argues that the current inflow pattern indicates a cyclical financial recovery rather than a structural transformation of the economy.