December 10, 2024/CSL Research

In Q3 2024, Nigeria recorded total capital importation of US$1.25 billion, a significant 91.35%
increase compared to the US$654.65 million reported in Q3 2023. However, this figure represents a significant 51.90% from the US$2.60 billion recorded in Q2 2024. Portfolio Investment—comprising stocks, bonds, and other financial instruments—dominated the inflows, amounting to US$899.31 million and accounting for 71.79% of the total capital imported. Other Investment followed with US$249.53 million (representing 19.92%), while Foreign Direct Investment (FDI) was the smallest contributor with US$103.82 million (8.29% of the total). Among sectors, the banking sector attracted the highest inflow, receiving US$579.48 million (46.26% of the total). The financing sector ranked second with US$294.55 million (23.51%).

The report highlights that the majority of capital imported during the period originated from the United Kingdom, which accounted for US$502.60 million or 40.12% of total inflows. This was followed by the Republic of South Africa, contributing US$185.03 million (14.77%), and the United States, with US$163.86 million (13.08%). At the state level, Lagos State emerged as the top destination for capital importation, receiving US$650.41 million, representing 51.92% of the total. The Federal Capital Territory (Abuja) ranked second with US$600.02 million (47.90%), while Kaduna State received a modest US$1.95 million (0.16%). Smaller inflows were recorded in Enugu (US$184,229) and Ekiti (US$96,600). This data underscores the concentration of capital inflows in key economic hubs, particularly Lagos and Abuja.

In Q3 2024, foreign portfolio investments (FPIs) totalled US$1.076 billion, with the majority (82.81%) directed towards money market instruments, while investments in equities were significantly lower, accounting for only 9.42%. The scarcity and volatility of the Naira have constrained FPI inflows into equities. Looking ahead, structural challenges and currency instability are expected to continue dampening investor sentiment in the near term.

Nonetheless, ongoing government reforms aimed at enhancing the ease of doing business, stabilizing the foreign exchange market, and addressing critical infrastructure deficits hold the potential to gradually foster a more favourable investment environment. These efforts, if sustained, could improve investor confidence over time.

Click here to read full PDF copy of report