Foreign Inflow Spikes to $8bn in First Half of 2025—Report
Despite a shift in global investors’ sentiments, foreign portfolio investors brought $8.05 billion into Nigeria in the first half of 2025, CardinalStone Partners Limited said in its mid-year outlook.
Nigeria’s reforms supported the influx of foreign inflows into the economy. Offshore investors show preference for Nigeria’s elevated yield on debt market instruments, driven by monetary policy tightening.
The Apex Bank’s inflation fighting has triggered successive policy rate hikes, which failed to bring the consumer price index to moderate levels. Critics said the authority has been focusing on the wrong side, noting a mismatch between fighting cost-push price distortion with demand-related policy.
In the recent past month, the Central Bank of Nigeria (CBN) accelerated open market operations activities following successive expirations of OMO bills. The authority floated six OMO auctions in the latter part of the first half, and this attracted offshore investors’ participation.
Hot money also flew into the equities market, reflecting healthy investors’ sentiment, at the Nigerian Exchange continues to break out against resistances. The investment firm noted that foreign interest in Nigeria continues to gain momentum, with FPI inflows reaching $8.05 billion in first six months of 2025.
Analysts said the amount was almost matching the total inflow of $8.53 billion recorded in 2024, projecting that inflows could reach $16.08 billion by year-end, marking the highest on record.
The firm said in the report that the foreign inflows surge appears to be driven by attractive carry-trade opportunities, as the Central Bank of Nigeria (CBN) has maintained a stable policy rate.
The Apex Bank has maintained tight monetary policy as against trend among central bankers in emerging markets.“ Consistent with our earlier view, the CBN was reluctant to ease too quickly in an effort to keep rates attractive to foreign investors.
Foreign inflows fell materially after Nigeria was excluded from the JP Morgan EM bond index, down to an average of $0.65 billion between 2015 and 2023 as against $1.83 billion in inflows before the period.
“We see room for sustained FPI inflows, particularly as Nigeria prepares for a potential re-entry into the JP Morgan Bond Index, having been excluded for the past decade”, CardinalStone said.
Analysts stated that CBN’s concerted efforts to restore confidence in the FX market—through increased transparency, liberalised pricing mechanisms, and enhanced investor engagement—are beginning to yield tangible results. In H1’25, foreign portfolio inflows into the equities market significantly improved, reflecting a clear turnaround in sentiment.
“We expect this renewed momentum in foreign investors’ activities to continue, supported by Nigeria’s relatively strong macro narrative and favourable positioning in the current global environment”, the firm said. #Foreign Inflow Spikes to $8bn in First Half of 2025—Report
