Nigeria’s Banking Sector Attracts 55% of Q1 2025 Foreign Capital Inflows Amid Reforms
Foreign investors have shown renewed confidence in Nigeria, with the banking sector emerging as the largest recipient of capital inflows in the first quarter of 2025. According to the National Bureau of Statistics (NBS), Nigeria attracted a total of $5.64 billion in capital inflows during this period, with banks receiving $3.1 billion—accounting for 55.44% of total foreign investments. The significant inflow highlights the sector’s central role in drawing international investment to the country.
The surge in investment comes on the back of reforms initiated by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso. Key measures such as unifying foreign exchange windows, clearing a $7 billion forex backlog, and enhancing currency stability have bolstered investor confidence. Analysts note that these reforms have not only increased portfolio investments in money market instruments, bonds, and equities, but also positioned Nigeria as an attractive destination for foreign capital amidst global economic uncertainty.
Portfolio investments dominated Q1 2025 inflows, totaling $5.2 billion or 92.25% of all capital, while foreign direct investment remained modest at $126.3 million. The United Kingdom led the inflow sources, contributing $3.68 billion. Economic experts argue that banking sector recapitalisation and robust regulatory oversight have been pivotal in creating a stable financial environment that supports large-scale investments and prepares Nigeria for its $1 trillion GDP target by 2030.
The NBS further highlighted that the broader Nigerian economy is benefiting from a rebased GDP that accurately reflects emerging sectors such as entertainment and technology. By capturing these previously underrepresented industries, the data presents a more comprehensive view of Nigeria’s economic potential. Economists stress that this rebasing, combined with banking and forex reforms, strengthens the foundation for long-term growth, better fiscal planning, and strategic investment decisions.
Looking ahead, policymakers emphasize the need for continued structural reforms and strategic investment to maintain momentum. Experts assert that sustaining capital inflows will require reinforcing financial sector resilience, increasing transparency, and prioritizing sectors with high growth potential. With these measures, Nigeria’s banking sector is expected to remain a primary magnet for foreign investment, helping to transform capital inflows into sustainable economic development.
Source: punch