WATCH THE VIDEO HERE Nigeria may not see significant foreign funds inflow this year because of its negative real interest rates resulting from inflation surpassing interest rates. This is according to the latest economy report by PricewaterhouseCoopers (PwC) International Limited, titled “2025 Nigerian Budget and Economic Outlook.” According to the report, Nigeria’s negative real interest rates remain a challenge, discouraging both local and international investors. It noted that this is despite the aggressive interest rate hike by the Central Bank of Nigeria (CBN) in 2024. “Declining interest rates in advanced economies are likely to lead to a reallocation of funds to more competitive markets offering higher real returns. “However, Nigeria may not benefit significantly from this because its negative real interest rates…may discourage investors” PwC stated in the report. Beyond the possible slowdown in foreign funds inflow, PwC also shared an insight on a scenario that may also lead to capital outflow from Nigeria. “If inflation rises in advanced economies in 2025, their central banks may increase policy rates, leading to a shift of funds towards these markets offering positive real returns. “This may exacerbate capital outflows from economies like Nigeria, where negative real interest rates diminish the appeal of local assets to international investors,” it projected. PwC noted that diaspora remittances, a critical source of foreign exchange for Nigeria, have averaged $20 billion annually over the past decade. However, inflows dipped slightly to $19.5 billion in 2023, attributed to slower economic growth in key remittance-sending countries like the United States and the United Kingdom. For 2025, PwC projects an uptick in remittance inflows supported by:
Why Nigeria may not attract ‘significant foreign funds’ in 2025—Report
