Nigeria’s capital importation hit $10.37 billion in the first quarter of 2026, a 61 percent jump from the $6.44 billion recorded the previous quarter, according to data released by the National Bureau of Statistics. The sharp rise was driven by a flood of portfolio investments, as foreign investors snapped up opportunities in improved market conditions and attractive yields in domestic financial markets.
The United Kingdom led the charge as the largest source of foreign capital, contributing $5.08 billion, or 49 percent of total inflows. The United States followed with $3.18 billion, representing 30.7 percent, while South Africa added $983.83 million, or 9.5 percent. Standard Chartered Bank Nigeria Limited emerged as the top channel for these funds, handling $4.41 billion, or 42.6 percent of total inflows.
Portfolio investments dominated, accounting for $9.86 billion, or a staggering 95.1 percent of all capital imported. Foreign Direct Investment, however, remained weak, contributing just $135.08 million, or 1.3 percent, underscoring the country’s growing reliance on short-term foreign capital, particularly in financial assets. Other investments added $374.48 million, or 3.6 percent.
The banking sector was the biggest beneficiary, attracting $7.55 billion, or 72.8 percent of total inflows. The financing sector followed with $2.43 billion, or 23.4 percent, while production and manufacturing accounted for a modest $152.27 million, or 1.5 percent.
Global ratings agency Fitch Ratings noted that Nigeria’s banking sector is reaping the rewards of naira liberalization, with stronger foreign-currency inflows, increased FX market turnover, and improved liquidity across the industry. However, Fitch warned that the withdrawal of long-standing regulatory forbearance measures has exposed asset quality issues, as impaired loan ratios have risen. Some restructured Stage 2 loans have been reclassified as impaired.
Fitch predicted a 20 percent credit growth in 2026, following a sharp deceleration in 2025 when nominal loan growth fell to just 2 percent. The agency attributed the expected rebound to improving macro conditions, higher oil revenues, and easing FX pressures. But it cautioned that persistent inflation risks, exacerbated by geopolitical tensions like the Iran conflict and domestic election spending, remain a threat.
The report also flagged high sovereign exposure among Nigerian banks, driven by large holdings of government securities and elevated cash reserves at the central bank. While this structure provides short-term stability, it ties bank balance sheets closely to sovereign credit dynamics. Capital Adequacy Ratios across most banks remained robust, with many institutions maintaining levels above 20 percent, though First Bank of Nigeria temporarily breached its 15 percent minimum requirement.
Fitch noted that naira liberalization is bearing fruit, with improved exchange rate stability and sustained rebuilding of external reserves by the Central Bank of Nigeria. Banks have also benefited from stronger foreign-currency liquidity and a net foreign asset position, supported by higher oil prices and improved FX inflows. Yet, the agency stressed that inflationary pressures remain entrenched, with upside risks from geopolitical and domestic factors.
