Nigeria Eyes Record $16.08bn in Foreign Portfolio Inflows Amid High Interest Rates
Nigeria is on track to record its highest-ever foreign portfolio investment (FPI) inflows by the end of 2025, as analysts project figures could hit $16.08 billion. This optimistic forecast is driven by the Central Bank of Nigeria’s (CBN) sustained high-interest-rate policy aimed at attracting foreign investors. So far, the country has recorded $8.05 billion in FPI inflows in the first half of the year, nearly equaling the total $8.53 billion seen in the entire 2024.
According to CardinalStone Research’s mid-year outlook report, titled ‘Charting the Sustainability Path’, Nigeria’s possible re-entry into the JP Morgan Bond Index after a decade-long exclusion could further boost investor confidence. Despite global uncertainties and a trend of capital flight from emerging markets, Nigeria appears to be defying the odds by maintaining policy consistency that appeals to international investors.
The CBN has held interest rates steady in recent months after a significant tightening in 2024 that saw a total 875 basis-point increase, bringing the rate to 27.5%. This aggressive stance has contributed to inflation control and supported naira stability. Unlike other central banks that have begun cutting rates, Nigeria is holding firm, leveraging high rates to attract foreign capital.
Market watchers expect the upcoming Monetary Policy Committee meeting to potentially introduce a mild rate cut, given signs of moderating inflation and exchange rate stability. However, analysts caution that the overall monetary direction will likely stay tight to maintain momentum in portfolio inflows and broader economic resilience.
The naira has remained relatively stable, trading between ₦1,500 and ₦1,600 per U.S. dollar in the first half of 2025, aided by improved foreign exchange liquidity and reduced demand pressure. While analysts at Cordros Research foresee continued short-term stability, they warn that any resurgence in global financial or commodity market volatility could trigger a gradual depreciation.
Source: Leadership