Foreign Inflows Into Nigeria Surge 39% in September as Investor Confidence Rebounds
Foreign inflows into Nigeria’s foreign exchange market rose sharply in September 2025, signaling a growing return of investor confidence despite weaker local participation. Data from the FMDQ Exchange showed that total inflows stood at $3.18 billion, slightly lower than August’s $3.37 billion, but the drop was largely due to reduced activity from local sources such as the Central Bank of Nigeria (CBN) and non-bank corporates.
According to the data, local inflows fell by 32.4% month-on-month to $1.42 billion, while foreign inflows jumped by 38.9% to $1.75 billion. This shift made foreign investors the dominant players, accounting for 55.2% of total market inflows compared to 44.8% from local participants. The CBN’s contribution declined significantly by 54.4%, while corporates and exporters also slowed their activity. Interestingly, individuals nearly doubled their inflows by 97.3%, suggesting stronger retail participation and possible remittance inflows.
The surge in foreign inflows was largely driven by renewed interest in Nigeria’s high-yield investment environment. Data revealed that Foreign Direct Investments (FDIs) increased by 12.2 percentage points, while Foreign Portfolio Investments (FPIs) rose by 22.3% month-on-month. Most of the gains came from fixed-income investments such as government bonds and treasury bills, which grew by 25.4%, while equities recorded a modest 1.3% rise, indicating continued caution amid naira volatility.
Analysts believe the improvement in foreign participation reflects growing confidence in the CBN’s ongoing reforms and efforts to stabilize the naira. Recent measures — including more transparent rate determination and targeted market interventions — have gradually restored liquidity and reduced uncertainty for investors. The rebound also aligns with global carry trade opportunities, as Nigeria’s tight monetary policy continues to attract yield-seeking capital.
Despite a slight overall dip from August’s figure, September’s inflows remain above the 2024 monthly average of $2.51 billion, signaling sustained recovery in FX liquidity. Market watchers remain optimistic that both local and foreign inflows will stay strong through year-end. “As long as reforms continue and monetary policy remains tight, inflows are likely to outperform last year’s levels,” analysts at Cordros Research said. However, they caution that exchange rate volatility and policy execution risks could still weigh on market stability in the coming months.
source: the sun