Foreign Inflows Drive Banking Capital to $3.1bn in Three Months

Foreign Inflows Drive Banking Capital to $3.1bn in Three Months
Capital importation into Nigeria’s banking sector surged to over $3.1bn in the first quarter of 2025, according to data released by the National Bureau of Statistics on Tuesday.

NBS data also showed that the manufacturing sector lost $62m in capital importation in the first quarter. The bureau, however, stated that capital importation into Nigeria rose significantly to $5.64bn during the review period, representing a 67.12 per cent increase compared to $3.38bn recorded in the corresponding period of 2024.

The report also showed that capital inflows increased by 10.86 per cent quarter-on-quarter from $5.09bn reported in Q4 2024, indicating a positive trend in foreign investor confidence during the opening months of the year.

In the banking sector, it noted that the total capital imported into the industry during the period stood at $3.13bn, representing 55.44 per cent of Nigeria’s total capital inflows of $5.64bn for Q1 2025. This marked a significant increase from the $3.38bn total capital importation recorded in the same period last year, reflecting a year-on-year growth of 67.12 per cent.

Portfolio investment dominated the inflows, accounting for $5.20bn or 92.25 per cent of total capital imported during the quarter.

Other investment inflows stood at $311.17m, while foreign direct investment recorded the least inflow at $126.29m.

Following the banking sector, the financing industry attracted $2.10bn or 37.18 per cent of the total capital importation in Q1 2025, while the production and manufacturing sector received $129.92m, representing 2.30 per cent.

Geographically, Abuja (Federal Capital Territory) emerged as the leading destination for capital importation with $3.05bn, accounting for 54.11 per cent of the total inflow. Lagos State closely followed with $2.56bn or 45.44 per cent. Ogun, Oyo, and Kaduna states recorded minimal inflows, receiving $7.95m, $7.81m, and $4.06m, respectively.

On the origin front, the United Kingdom was the top source of capital inflows with $3.68bn or 65.26 per cent of total capital importation during the quarter. South Africa and Mauritius followed with $501.29m and $394.51m, respectively.

Among financial institutions, Standard Chartered Bank Nigeria Limited led with $2.10bn, representing 37.29 per cent of total capital imported. Stanbic IBTC Bank Plc followed with $1.40bn or 24.78 per cent, while Citibank Nigeria Limited accounted for $1.05bn or 18.66 per cent.

The NBS data also showed that total capital importation into Nigeria rose by 10.86 per cent from $5.09bn recorded in Q4 2024 to $5.64bn in Q1 2025, highlighting growing investor confidence in the country’s economy.

It said the manufacturing sector lost $62m in capital importation. The performance calls into question the level of investor confidence and the pace of recovery in the sector.

Despite a 67.12 per cent year-on-year rise in total capital inflows into the country, the manufacturing sector recorded a 32.31 per cent decline in capital importation in Q1 2025.

In its capital importation data, the NBS reported that the manufacturing sector attracted $129.92m in Q1 2025, down from $191.92m in the corresponding quarter of 2024. The sector’s share of total capital importation also fell from 5.68 per cent in Q1 2024 to 2.30 per cent in Q1 2025.

The manufacturing sector’s capacity to attract foreign investment has remained weak. The 2023-2024 window saw multinationals exit with a harsh operating environment in the height of economic reforms introduced by President Bola Tinubu.

As the reforms weakened purchasing power and slowed consumption, manufacturers invested less. The Manufacturers Association of Nigeria noted that its members’ unsold finished goods rose by 87.5 per cent to N2.14tn in 2024.

In 2025, the impact of the reforms, including the consolidation of the foreign exchange regime, led industry watchers to express cautious optimism that foreign investment would stabilise in the manufacturing sector. Notably, MAN Director-General Segun Ajayi-Kadir has noted that a half-year decline of 27.9 per cent suggested some improvement in inventory clearance and pricing strategies.

Source: EconomicConfidential | Continue to Full Story…