Foreign investment in Nigeria’s production and manufacturing sector has fallen sharply by 50.7 percent quarter-on-quarter to $152.27 million in the first quarter of 2026 (Q1’26), from $308.93 million in the preceding quarter (Q4’25), according to the latest Capital Importation Report of the National Bureau of Statistics (NBS).
The report further stated that the sector accounted for just 1.47 per cent of the overall capital imports of $10.37 billion recorded in the review period, showing the persistent challenge of attracting major foreign capital into the productive sector of the economy.
However, foreign investment in the sector increased by 17.2 percent on year on year basis from $129.92 million recorded in the similar quarter of 2025 (Q1’25) writes Vanguard.
The further study of the NBS data shows that the share of the total capital inflows to the manufacturing sector has continued to drop. The 1.47 per cent contribution achieved in Q1’26 was lower than the 2.3 per cent recorded in Q1’25 and well below the 4.79 per cent posted in Q4’25.
The study stated that portfolio investment continued to be the largest source of foreign capital at $9.86 billion or 95.09 per cent of overall inflows in the quarter. Other Investments provided $374.48 million, representing 3.61 per cent, while Foreign Direct Investment (FDI) was $135.08 million, representing only 1.30 per cent of the total capital brought into the country.
In terms of the sectoral distribution, the banking industry garnered the highest proportion of foreign capital, accounting for $7.55 billion or 72.79 percent of overall inflows. The financing industry was next with $2.43 billion or 23.42 per cent and production and manufacturing with a paltry $152.27 million.
Reacting to the development, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf said the pattern of capital inflows is a reflection of a persistent structural weakness in the economy. He added that increase in foreign capital is yet to translate into meaningful expansion of productive capacity.
“There will be limited gains in terms of employment, productivity and inclusive growth in the broader economy without a stronger inflow of capital into industry, agro-processing, logistics, energy and export-driven manufacturing,” he said.
Financial deepening without expansion of the real sector risks creating a liquidity-driven recovery that does not substantially transform Nigeria’s productive base.
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