Nigeria’s Capital Importation Hits Record $10.37bn in Q1 2026, Surges 83.8%

Nigeria’s capital importation surged 83.80 per cent year-on-year in the first quarter of 2026, hitting a record $10.37 billion. This is up from $5.64 billion recorded in Q1 2025, according to the weekly economic analysis released by Meristem Securities Limited.

Meristem reported that the sharp acceleration in foreign participation was channelled mainly through the local banking system. The banking sector attracted $7.55 billion, or 72.80 per cent of total inflows. Financing activities followed at $2.43 billion, representing 23.40 per cent. Manufacturing received only $152.30 million, or 1.50 per cent.

Analysts at Meristem noted that the current investment wave favours short-term instruments, not long-term infrastructure. “This structure highlights that, despite the strong headline expansion compared to Q1 2025, capital importation remains largely a financial-market-driven cycle rather than a shift towards productive long-term investment,” the firm explained.

Macroeconomic Reforms Drive Offshore Appetite

The report attributed the revived offshore appetite for Nigerian fixed-income assets to recent macroeconomic reforms. “The strong year-on-year acceleration versus Q1 2025 was driven by improved FX market functioning, exchange rate flexibility, and relatively attractive domestic yields, which collectively restored offshore appetite,” Meristem noted.

This translated into an 8.54 per cent year-on-year growth in capital inflows’ contribution to GDP, reaching 3.76 per cent in Q1 2026.

OMO Auction and Treasury Bills See Strong Demand

The influx of foreign portfolio investment aligned with intense activity in the Central Bank of Nigeria’s open market operations. The CBN’s OMO auction recorded total subscriptions of N3.28 trillion against an allotment of N3.04 trillion, reflecting sustained liquidity appetite for short-term, high-yield instruments. Demand was heavily concentrated in the 133-day paper, with the stop rate averaging 20.99 per cent.

In the Treasury bills market, demand rebounded above N2.00 trillion to N2.16 trillion, up 8.64 per cent from the previous auction. Investor appetite remained strongly skewed toward the long end, with the 364-day bill attracting N1.95 trillion of subscriptions.

Abbey Mortgage Bank Gets Approval to Become Commercial Bank

The report also highlighted major structural changes within the domestic financial landscape. The CBN recently gave final approval for Abbey Mortgage Bank Plc to transition into a full commercial bank, with operations set for Q4 2026. “The approval represents a regulatory licence upgrade supported by both strong financial performance and capital readiness,” the analysts stated. The bank’s shareholders have approved a capital raise of about N264 billion to meet tier-2 capital requirements.

However, Meristem cautioned that entering the wider commercial banking space comes with fresh hurdles. “From a strategic standpoint, this transition shifts the bank from a specialised mortgage lender to a full-service financial institution. However, the move also introduces greater operational and financial risks, particularly around credit underwriting, liquidity management, and deposit mobilisation,” the firm noted.

Outlook: Sustained FPI Growth Expected

Looking forward, Meristem Securities expressed optimism that foreign portfolio inflows will maintain their momentum, provided policy consistency remains intact. “We expect the growth in FPI to be sustained, supported by macroeconomic stability, expected moderation in inflation, still attractive domestic yields, improved sovereign credit ratings, and credible FX policy execution,” the report concluded.