The Business NG - August 11, 2025

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Editorial Focus – BusinessNG (August 11, 2025)

Nigeria’s economy recorded a sharp rise in capital inflows in the first quarter of 2025, with total receipts hitting $5.64 billion — a 67% jump from $3.38 billion in the previous quarter, according to National Bureau of Statistics (NBS) data. However, more than 90% of these inflows were portfolio investments, often described as “hot money” due to their short-term, speculative nature.

While the surge offers temporary relief for the naira and boosts liquidity in capital markets, it also underlines Nigeria’s structural vulnerability. Portfolio funds can exit as quickly as they arrive, leaving the economy exposed to sudden reversals triggered by global interest rate shifts, currency pressures, or political instability.

Worryingly, foreign direct investment (FDI) — the more stable, long-term capital critical for infrastructure, industrial growth, and job creation — remains weak. This imbalance signals deeper challenges in attracting committed investors, from policy unpredictability to security risks and inadequate infrastructure.

BusinessNG’s focus today is on the urgent need for Nigeria to rebalance its investment profile, prioritising sustainable FDI inflows over volatile short-term capital to ensure lasting economic stability and growtth