Portfolio inflows hit $6.03bn as foreign investors boost Nigeria exposure

Foreign portfolio investment into Nigeria rose to $6.03bn in the first quarter of 2026, up 14.4 per cent from $5.27bn in the preceding quarter, according to the Central Bank of Nigeria’s Q1 2026 Economic Report.

The inflow was the largest component of Nigeria’s $7.22bn financial liabilities during the quarter. It was almost six times the $1.03bn recorded as direct investment liabilities. Direct investment liabilities fell 7.09 per cent quarter-on-quarter, while other investment liabilities stood at $220m.

Equities drive the increase

The CBN attributed the rise in portfolio investment largely to higher purchases of Nigerian equities by foreign investors. The data shows a widening gap between portfolio and direct investment. A larger share of foreign capital entering Nigeria was directed at tradable financial assets rather than investments involving longer-term ownership or operational commitments.

The stronger inflow came as external sector conditions improved. Total foreign exchange inflows rose 13.26 per cent to $31.34bn from $27.67bn in the fourth quarter of 2025. Foreign exchange outflows declined 11.78 per cent to $11.01bn. That produced a net foreign exchange inflow of $20.33bn, significantly higher than the $15.19bn recorded in the previous quarter.

Autonomous sources accounted for $21.15bn of total FX inflows, a 23.90 per cent increase quarter-on-quarter. The CBN said net inflows from autonomous sources reached $17.53bn, more than six times the $2.80bn recorded through the CBN and banking system combined.

Reserves rise but liabilities grow

Nigeria’s external reserves rose to $48.35bn at the end of March 2026, compared with $45.75bn at the end of December 2025. The reserve level provided about 8.84 months of import cover, well above the three-month benchmark commonly used to assess external liquidity adequacy.

The surge in portfolio investment also increased Nigeria’s foreign financial obligations. Total international financial liabilities rose to $226.58bn from $220.82bn during the quarter. Portfolio investment liabilities increased 14.08 per cent to $58.01bn, making them the fastest-growing component of Nigeria’s international financial liabilities. Direct investment liabilities remained the largest category at $90.38bn, while other investment liabilities stood at $78.03bn. Against international financial assets of $127.34bn, Nigeria’s net international investment position remained negative at $99.24bn.

Strong demand for naira securities

The increase in portfolio flows coincided with strong demand for naira-denominated securities during the quarter. Central Bank of Nigeria Open Market Operations bills attracted N35.62tn in subscriptions against N9tn offered. Nigerian treasury bills received N24.93tn in bids against N7.97tn offered.

The heavy demand for government and central bank securities indicates strong investor appetite for Nigerian fixed-income instruments, although the CBN’s financial account data shows that equities accounted for much of the increase in portfolio investment during the quarter. The development comes as Nigeria seeks to deepen foreign participation in its domestic capital markets and improve access to international capital.

The growing foreign participation in Nigeria’s securities market comes against a sizeable public debt stock. Nigeria’s consolidated public debt stood at N159.27tn at the end of December 2025, representing 36.94 per cent of GDP.