Surge in Nigeria's Capital Importation Boosts Rate Cut Case

The recent surge in capital importation and foreign direct investment (FDI) in Nigeria has bolstered the argument for a potential interest rate cut by the Monetary Policy Committee (MPC) as they convene. Analysts from Afrinvest report that capital inflow rose to $6.0 billion in Q3 2025, marking a 17.5% quarter-on-quarter increase and a 380.2% year-on-year rise, the strongest quarterly performance since Q2 2019.

Cumulatively, capital inflow for the first nine months of 2025 reached $16.8 billion, the highest since 2019. Portfolio investments surged by 15.6% quarter-on-quarter, totaling $4.9 billion, driven by strong equity and bond market performance.

FDI also saw a significant increase of 107.6% quarter-on-quarter, amounting to $296.3 million in Q3 2025. Despite these positive trends, analysts caution about uncertainties surrounding domestic financing and the projected fiscal deficit of N23.9 trillion for 2026, which may affect the MPC's decision on rate cuts.