Capital Importation Drops 62% in August, FDI Surges 140%

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Nigeria’s capital importation fell sharply by 62 per cent month-on-month (MoM) to $1.13 billion in August 2025, down from $2.98 billion in July, according to the Central Bank of Nigeria (CBN).

In contrast, Foreign Direct Investment (FDI) surged 140 per cent MoM to $120 million in August, rising from $50 million in the previous month, driven by stronger equity inflows.

CBN Highlights Shifts in Capital Flows

The CBN’s August Monthly Economic Report noted that overall capital inflow moderated due to lower foreign portfolio investments.

“Foreign direct investment increased as relative stability in the economy continued to bolster investor confidence,” the CBN said. “FDI rose by 140 per cent to $0.12 billion from $0.05 billion in July, thanks to increased equity inflows.”

However, portfolio investment and other investments, mainly loans, declined sharply. Portfolio investment dropped to $0.92 billion from $2.43 billion, while other investments fell to $0.09 billion from $0.50 billion. Consequently, total capital importation decreased to $1.13 billion.

The report also revealed the composition of capital inflows: portfolio investment accounted for 81.42 per cent, direct investment 10.62 per cent, and other investment 7.96 per cent.

Banking Sector Dominates Capital Allocation

Analysis by sector showed that the banking industry received the largest share of capital importation at 68.15 per cent, followed by finance at 22.18 per cent, production/manufacturing at 3.7 per cent, and trading at 2.97 per cent. Other sectors shared the remaining allocation.

On the capital outflow side, the CBN reported a moderation due to lower loan repayments and capital transfers. Total outflow fell to $0.86 billion, down from $1.36 billion the previous month. Loan repayments declined by 55.38 per cent to $0.29 billion, while capital transfers dropped 27.93 per cent to $0.49 billion. Conversely, repatriation of dividends increased to $0.08 billion from $0.02 billion.

The data highlights a mixed trend: while Nigeria attracts more long-term investments through FDI, short-term portfolio investments are slowing, signalling cautious investor sentiment amid broader economic uncertainty.