Nigeria’s net foreign liabilities climbed sharply to $90.2 billion in 2025, reflecting the country’s growing dependence on foreign capital despite improvements in external reserves. Fresh data released by the Central Bank of Nigeria (CBN) revealed that foreign investors’ claims on Nigerian assets expanded more rapidly than Nigeria’s investments abroad, pushing the country’s net financial liability position up by $7.5 billion from $82.7 billion recorded in 2024. The latest figures highlight both renewed investor confidence and the increasing challenge of managing external financial obligations.
According to the CBN’s International Investment Position (IIP) report, Nigeria held $125.6 billion in external financial assets while foreign investors owned $215.8 billion worth of Nigerian assets at the end of 2025. Unlike the Balance of Payments, which tracks transactions over a period, the IIP measures the total value of a country’s foreign assets and liabilities at a specific point in time. The report paints a clearer picture of Nigeria’s overall financial relationship with the rest of the world and its exposure to global investment trends.
A significant portion of the increase in foreign liabilities came from a $10.1 billion rise in portfolio investments, largely driven by foreign investors purchasing Nigerian government debt instruments, including Open Market Operation (OMO) bills. High domestic interest rates made these securities increasingly attractive to international investors seeking better returns. In addition, foreign direct investment liabilities increased by $6.7 billion, suggesting that international businesses continue to see opportunities in key sectors of Nigeria’s economy despite ongoing economic challenges.
On the positive side, Nigeria strengthened its financial buffers through a $5.6 billion increase in reserve assets, while Nigerian individuals and businesses also expanded their foreign investments by an additional $3.3 billion. These gains improve the country’s ability to withstand external shocks and support foreign exchange stability. However, economists caution that the growing share of short-term portfolio investments leaves the economy vulnerable to sudden capital flight if global financial conditions change or investor confidence weakens.
Analysts believe Nigeria’s long-term economic stability will depend less on attracting short-term funds and more on securing productive foreign direct investment that creates jobs, expands industrial capacity, and boosts non-oil exports. They also note that stronger crude oil prices could provide additional foreign exchange earnings, but lasting resilience will require policies that reduce reliance on volatile capital inflows. As Nigeria continues to navigate global economic uncertainty, building a more diversified and sustainable investment base remains critical to protecting the economy and strengthening the naira.
source: punch
