Foreign capital inflows into Nigeria surged by 84 percent in the first quarter of 2026, reaching $10.37 billion and reflecting growing investor confidence in the country’s economic reforms.
The sharp increase represents a significant rise from the $5.63 billion recorded during the same period in 2025. Analysts attribute the growth to ongoing foreign exchange reforms, tighter monetary policy and efforts by authorities to improve market transparency and attract international investment.
Portfolio investment remained the dominant source of foreign capital during the quarter, accounting for the largest share of total inflows. Investors were drawn by elevated yields in Nigeria’s fixed-income market, particularly Treasury bills and Open Market Operations securities, which have benefited from the Central Bank of Nigeria’s aggressive monetary tightening measures.
Foreign direct investment also recorded growth, although it continued to trail portfolio flows by a wide margin. The increase suggests that some investors are beginning to take longer-term positions in the economy despite persistent structural challenges.
The financial services sector attracted the largest share of foreign capital, followed by investments in telecommunications, manufacturing and other productive sectors. Market participants say improvements in foreign exchange liquidity and greater exchange-rate flexibility have helped reduce some of the uncertainties that previously discouraged investment.
The rise in capital inflows comes as the CBN continues efforts to stabilise the naira and contain inflation. Higher interest rates have boosted the attractiveness of Nigerian assets to foreign investors seeking stronger returns in emerging markets.
A stronger inflow of foreign capital could provide additional support for the country’s external reserves and foreign exchange market. Increased dollar availability may also help ease pressure on the naira, although analysts caution that portfolio flows can be highly sensitive to shifts in global financial conditions.
Despite the positive trend, economists note that sustaining the momentum will require continued policy consistency and improvements in the business environment. Issues such as infrastructure deficits, energy costs and regulatory uncertainty remain key concerns for long-term investors.
The latest figures, nevertheless, suggest that recent economic reforms are beginning to influence investor sentiment. Nigeria has spent much of the past two years implementing measures aimed at restoring confidence, improving market efficiency and encouraging greater participation by foreign investors.
With global investors increasingly searching for higher-yield opportunities, Nigeria appears to be benefiting from renewed interest in frontier and emerging markets. Whether the gains can be sustained will depend largely on macroeconomic stability, inflation management and the government’s ability to maintain reform momentum in the months ahead.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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