Foreign Capital Inflows Jump 94% to $23.4bn on FX Reforms, CBN Reports

Nigeria’s foreign capital inflows almost doubled in 2025 as ongoing foreign exchange market reforms and attractive domestic investment yields restored investor confidence, with total capital importation rising by 93.71 per cent to $23.40 billion, according to the Central Bank of Nigeria (CBN).

The CBN, in its just released 2025 Annual Report and Statement of Accounts, attributed the sharp increase from $12.08 billion recorded in 2024 to sustained reforms in the foreign exchange market, particularly the introduction of the Nigeria Foreign Exchange (FX) Code, alongside competitive returns in the domestic financial market.

The report stated that: “Capital inflow increased by 93.71 per cent to $23.40 billion in 2025, from $12.08 billion in 2024, owing to gains from ongoing reforms in the FX market, particularly the renewed investor confidence, coupled with competitive returns in the domestic financial market.”

The strong rebound in investment inflows came despite a challenging global environment marked by geopolitical tensions, trade frictions and policy uncertainty.

According to the apex bank, portfolio investment remained the dominant source of foreign capital, accounting for $19.86 billion, or 84.85 per cent of total capital importation. Of this amount, investments in money market instruments contributed $13.94 billion, bonds accounted for $4.89 billion, while equity investment stood at $1.02 billion.

Other investment inflows amounted to $2.62 billion, representing 11.2 per cent of total capital imported into the country. These were driven largely by loans valued at $2.55 billion. Foreign direct investment (FDI), however, contributed $920 million, accounting for 3.95 per cent of total capital inflows.

The United Kingdom retained its position as Nigeria’s largest source of foreign capital, accounting for $12.31 billion, or 52.59 per cent of total inflows. It was followed by the United States with $3.07 billion, South Africa with $2.84 billion, and Mauritius with $1.86 billion. Banking and financing remained the biggest recipients of foreign capital, attracting 87.29 per cent of total inflows during the year.

The CBN linked the resurgence in foreign investment to reforms introduced to improve transparency, governance and efficiency in Nigeria’s foreign exchange market.

During the year, the Bank launched the Nigeria Foreign Exchange (FX) Code, built around six principles covering ethics, governance, execution, information sharing, risk management, and confirmation and settlement.

It also sustained the “Willing Buyer-Willing Seller” framework, continued implementation of the Electronic Foreign Exchange Matching System (EFEMS), introduced the Non-Resident Bank Verification Number (NRBVN), and rolled out Non-Resident Nigeria Ordinary and Investment Accounts to strengthen diaspora participation in the economy.

In his statement accompanying the report, CBN Governor Olayemi Cardoso said the reforms had restored confidence in the foreign exchange market.

He said: “Major milestones achieved in 2025 were the stability and increased predictability of the exchange rate, and the moderation in inflation. The progress reflected renewed confidence in the policy measures introduced to restore stability in the foreign exchange market and the effectiveness of the Bank’s monetary policy decisions.”

Cardoso added that the Bank launched the FX Code and continued implementation of EFEMS “to promote ethical practices and professionalism within the Nigerian foreign exchange market.”

The report showed that improvements in investor confidence also strengthened Nigeria’s broader external sector.

Although the country’s balance of payments surplus moderated to $4.23 billion from $6.83 billion in 2024, capital inflows helped support a surplus in the current and capital account, while external reserves rose to $45.75 billion, enough to finance 8.77 months of imports of goods and services. The naira also strengthened to N1,435.76 per US dollar at the end of 2025, compared with N1,535.82 a year earlier.

Beyond capital importation, the report showed that Nigeria’s overall foreign exchange ecosystem also recorded stronger performance during the year.

Aggregate foreign exchange inflows into the economy rose by 13.81 per cent to $109.86 billion, driven mainly by higher inflows through autonomous sources such as non-oil export receipts and over-the-counter purchases, particularly capital importation. Total net foreign exchange inflow increased to $60.81 billion, compared with $58.16 billion recorded in 2024.