The Central Bank of Nigeria (CBN) has reported that foreign direct investment (FDI) into Nigeria plunged by 80% in January 2026 as foreign investors committed their investment more on debt instrument, particularly FGN bonds and other money market instruments during the month.
The apex bank’s latest Economic Report in the month under review reflected that despite a sharp rise in overall capital inflows, the FDI fell to $30 million from $150 million in December 2025, just as foreign portfolio investment increased to $3.37 billion from $940 million, reflecting investors’ growing preference for debt assets over long-term productive investments.
The CBN reported: “Direct investment fell by 80.0 per cent to $0.03 billion in the review period.
“The economy recorded a higher inflow of capital during the review period, driven mainly by the significant increase in portfolio investment inflow”, it added.
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Overall, the report revealed that capital importation in January this year rose to $3.52 billion compared with $1.25 billion recorded in December 2025 due to increased foreign invetors’ participation in the domestic fixed-income market.
A further analysis of the report indicated that foreign portfolio investment accounted for $3.37 billion of the total inflow in January, reflecting a sharp increase from the $0.94 billion in December 2025, due to significantly higher inflows for the purchase of bonds and money market instruments.
Data from the report showed that portfolio investment accounted for 95.72% of total capital inflows, while direct investment contributed only 0.77% during the month under review. Also, other investments, including loans, accounted for 3.51% of total inflows and declined to $120 million from $160 million in the preceding month.
By implication, the data suggested that though foreign investors were showing more interest in Nigeria’s financial markets due to high yields on fixed-income securities, appetite for long-term investments in factories, infrastructure, and other productive ventures remained low.
The apex bank’s figures revealed that FDI inflows by sectoral analysis indicated that the banking industry was the biggest beneficiary of foreign capital inflows, attracting 75.15% of the total inflows into the nation’s economy in January.
The report further reflected that Financing activities accounted for 22.20% of total inflows, while Production and Manufacturing received just 1.16% and Investments in shares accounted for 0.76%, with trading and other sectors accounting for the FDI balance.
On merchandize trade trend in January this year, the CBN reported that Nigeria recorded a stronger trade position, aided by higher export earnings and sustained capital inflows.
According to the CBN, Nigeria’s external reserves rose to $48.88 billion in January 2026, providing import cover of 8.93 months for goods and services just as the local currency gained 2.43% in exchange value at the Nigerian Foreign Exchange Market to N1,416.52/$, higher than the value of the reserves in December 2025.
Analysts believe that although macroeconomic conditions and foreign exchange stability encouraged surge in foreign participation in the nation’s financial markets, investors continue to rush for liquid debt instruments over long-term commitments in the real sector of the economy.
