August 12, 2025/Coronation Report

Summary  

The National Bureau of Statistics (NBS) released its latest report on capital importation for Q1 ‘25. The total value of capital imported in Q1 ’25 was estimated at US$5.64bn, the highest in 5 years.

This represents an increase of 67.12% y/y and 10.86% q/q, driven by a surge in Foreign Portfolio Investments (FPIs) amid high yields in short term fixed income instruments. It is worth to note that the capital importation data is gross, and not adjusted for capital exports.

The Foreign Portfolio Investments (FPIs) which accounted for 92.25% of the total capital inflow in the period under review surged by 150.75% y/y to $5.20bn, and edged higher by 30.14% q/q. This spike in FPIs was largely concentrated in money market instruments like OMO and Treasury bills.

In Q1 ’25, money market instruments accounted for 80.89% ($4,21bn) of total portfolio investments, reflecting a significant increase of 162.23% y/y from US$1.61bn in Q1 ’24 and on a quarterly basis, it increased by 19.45%.

The contribution of bonds to portfolio investments was relatively low and stood at 16.86% (US$877.41). This shows an increase of 108.50% y/y and 165.48% q/q from US$330.51m, suggesting increased appetite for fixed income securities amid attractive yield levels.

Meanwhile, FPI in the local equities market declined by 18.69% q/q, underscoring persistent foreign investor caution in that market. Data from NGX shows that NGX All Share Index (ASI) posted a growth of 2.66% during the quarter. This asset class accounted for just 2.25% (US$117.33m) of total portfolio investments.

Foreign Direct Investment (FDI) remained weak at US$126.29m, declining by 70.06% q/q and rose marginally by 5.97% y/y. We observed that contribution of FDI to capital importation slowed to 2.24% from 8.29% in Q4 ’24. The muted FDI performance reflects structural challenges, including policy uncertainty, and infrastructure bottlenecks.

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