Despite being the largest economy and most populous nation in Sub-Saharan Africa (SSA), Nigeria has not yet positioned itself as a significant source of foreign direct investment (FDI) or remittances within the region, according to the World Bank’s Global Economic Prospects 2025 report.
The report highlights that Nigerian banks continue expanding across SSA, yet the country’s overall contributions to regional investment and financial flows remain limited. This contrasts with Nigeria’s economic potential and market size.
According to the World Bank, Nigeria’s participation in intraregional trade and investment remains below expectations. The report states, “Despite having the largest economy and population in SSA, Nigeria plays a modest intraregional role as an export destination and has not yet become a major source of FDI or remittances, although its banks have a regional presence.”
The World Bank projects Nigeria’s economy to grow by 3.5% in 2025 and further improve to 3.7% in 2026. This growth is driven by an expanding services sector and improved macroeconomic stability.
- In 2024, economic growth rises to 3.3%, supported by strong performance in financial and telecommunications services.
- Macroeconomic and fiscal reforms implemented in 2024 strengthen business confidence, contributing to the projected growth for 2025 and 2026.
- The services sector remains the primary driver of growth, while oil production increases modestly but remains below Nigeria’s OPEC quota.
Capital Importation Decline in Q3 2024
Nigeria’s total capital importation in the third quarter (Q3) of 2024 falls by 51.90% compared to the previous quarter, dropping to $1.25 billion from $2.60 billion in Q2 2024. Despite this quarterly decline, capital importation records an annual increase of 91.35% compared to Q3 2023.
- Portfolio investments account for the largest share, contributing $899.31 million (71.79%) of total inflows, reflecting sustained investor interest in Nigerian equities, bonds, and other financial assets.
- Other investments follow with $249.53 million (19.92%).
- Foreign Direct Investment (FDI) contributes just $103.82 million (8.29%), indicating relatively weak long-term investor confidence.
Key Sources of Capital Inflows
- The United Kingdom remains the top source of capital importation, contributing $502.60 million (40.12%) of total inflows.
- South Africa follows with $185.03 million (14.77%), while the United States accounts for $163.86 million (13.08%).
- The strong presence of the UK and South Africa reflects continued investment interest from major African and European economies.
Lagos and FCT Lead in Investment Inflows
- Lagos State retains its position as the top destination for capital inflows, attracting $650.41 million (51.92%) of total capital in Q3 2024.
- The Federal Capital Territory (FCT), including Abuja, follows closely with $600.02 million (47.90%), reinforcing the strategic role of Nigeria’s political and economic hubs in attracting foreign investments.
As Nigeria works toward strengthening its role in regional investment and financial flows, addressing structural economic challenges remains essential in unlocking its full potential in foreign direct investment and remittances.
, Nigeria has not yet positioned itself as a significant source of foreign direct investment (FDI) or remittances within the region, according to the World Bank’s Global Economic Prospects 2025 report.){kind=link}