Nigeria’s Foreign Portfolio Investments are projected to reach a record-breaking $16.08 billion by the end of 2025, driven by the Central Bank of Nigeria’s sustained high interest rate policy designed to attract international investors.
The first half of 2025 alone recorded $8.05 billion in foreign portfolio investment inflows, nearly matching the entire $8.53 billion recorded for 2024. This surge comes as Nigeria maintains its benchmark interest rate at 27.5 percent, one of the highest globally, following aggressive monetary tightening measures implemented last year.
“At the current run rate, inflows could reach $16.08 billion by year-end, marking the highest on record,” according to financial analysts tracking the investment flows. The sustained inflows demonstrate growing investor confidence despite global market volatility and emerging market uncertainties.
The Central Bank’s hawkish monetary stance, maintaining rates at elevated levels while other central banks globally have begun easing cycles, has successfully attracted foreign capital seeking higher yields. This strategy has proven effective in stabilizing the naira, which has remained within the 1,500 to 1,600 per dollar range throughout the first half of 2025.
Economic experts indicate that robust portfolio investment flows typically precede increased Foreign Direct Investment, as investors initially test market conditions through short-term investments before committing to long-term capital deployment. The current trend suggests Nigeria may soon experience a significant uptick in direct foreign investment.
“Investors test the waters of an economy via portfolio investments because that’s short-term. When they see high yields and confidence in the economy, they tend to commit for the long term,” explained a senior economist at a Lagos-based research firm.
The positive investment climate has been further supported by improved foreign exchange liquidity and reduced demand pressures on the naira. Nigeria’s preparation for potential re-entry into the JP Morgan Bond Index, after a decade-long exclusion, could further amplify international investment interest.
Market analysts anticipate continued foreign portfolio investment growth, particularly in longer-tenor instruments, as investors seek to lock in attractive yields amid global economic uncertainties. The sustained inflows represent a significant turnaround from previous years when currency instability and policy inconsistencies deterred foreign investors.
This investment surge aligns with broader economic reforms aimed at creating a more attractive investment environment and positioning Nigeria as a preferred destination for international capital in the African market.
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