FDI drops 80% as investors favour bonds

Foreign direct investment into Nigeria plunged by 80 per cent in January 2026 as foreign investors increasingly channelled funds into bonds and money market instruments, despite a sharp rise in overall capital inflows, the latest Economic Report of the Central Bank of Nigeria has shown. The report revealed that FDI fell to $30m in January from $150m in December 2025, while foreign portfolio investment surged to $3.37bn from $940m over the same period, showing investors’ preference for debt assets over long-term productive investments. According to the CBN, “Direct investment fell by 80.0 per cent to $0.03 billion in the review period.” The apex bank, however, noted that total capital inflow into the economy rose significantly during the month. “The economy recorded a higher inflow of capital during the review period, driven mainly by the significant increase in portfolio investment inflow,” the report stated. Overall capital importation climbed to $3.52bn in January 2026, compared with $1.25bn recorded in December 2025, largely on the back of increased foreign participation in the domestic fixed-income market. The report stated that foreign portfolio investment accounted for $3.37bn of the total inflow. “A disaggregation showed that inflow of foreign portfolio investment amounted to $3.37 billion, a surge from the $0.94 billion in December 2025, due to significantly higher inflows for the purchase of bonds and money market instruments,” the CBN said. Further analysis showed that portfolio investment accounted for 95.72 per cent of total capital inflows during the review period, while direct investment contributed only 0.77 per cent. Other investment, consisting mainly of loans, accounted for 3.51 per cent of total inflows and declined to $120m from $160m in the preceding month. The figures suggest that while foreign investors are returning to Nigeria’s financial markets, particularly attracted by high yields on fixed-income securities, appetite for long-term investments in factories, infrastructure, and other productive ventures remains subdued. Sectoral analysis in the report showed that the banking industry was the biggest beneficiary of foreign capital inflows, attracting 75.15 per cent of the total funds imported into the economy in January. Related News Tinubu’s weight-loss programme three years later Price hike forces pregnant women to abandon fruits despite health risks Personal loans hit N1.96tn as consumer credit grows Financing activities accounted for 22.20 per cent of total inflows, while production and manufacturing received just 1.16 per ce