Foreign direct investment (FDI) inflows into Nigeria declined by 19% to $250 million in Q1 2025, compared to $310 million in the previous quarter.
This is according to the Central Bank of Nigeria’s (CBN) latest Balance of Payments report.
The report read, “DI inflows declined slightly to US$0.25 billion in Q1 2025, from US$0.31 billion in Q4 2024.”
While the figure marks a quarter-on-quarter contraction, it represents a recovery from the net divestment of $310 million recorded in Q1 2024, signalling a fragile return of investor confidence in the country’s long-term prospects.
The decline in Q1 2025 reflects a broader slump in capital inflows, with portfolio investments suffering an even sharper reversal. Overall, the financial account came under pressure, weakening Nigeria’s external position despite a current account surplus and positive trade performance.
The overall balance of payments position deteriorated in Q1 2025, swinging into a deficit of $2.77 billion, compared to a surplus of $1.10 billion in Q4 2024. The deficit, which reflects the gap between total inflows and outflows across current and capital accounts, was driven by the sharp decline in portfolio and other investment inflows.
The weakening of the external position translated into a drop in Nigeria’s external reserves, which fell to $37.82 billion by the end of March 2025 from $40.19 billion in December 2024. The net errors and omissions account, which captures unrecorded financial flows, stood at $3.85 billion, slightly lower than the $4.02 billion reported in Q4 2024.
The balance on the secondary income account, which includes remittances and foreign aid, fell 17.9% to $5.29 billion, following a decline in diaspora remittances from $5.08 billion to $4.93 billion. Foreign aid and grant inflows to the general government also dropped significantly by over 67%, possibly linked to geopolitical policy shifts, including executive orders restricting aid from some Western nations.