Business
Nigeria’s FDI jumps 148% despite Africa’s investment decline
By Yinka Kolawole
Nigeria emerged as one of Africa’s strongest foreign investment performers in 2025, recording a 148 per cent increase in Foreign Direct Investment (FDI) inflows despite a sharp decline across the continent, according to the UN Trade and Development (UNCTAD) World Investment Report 2026.
The report showed that global FDI rebounded by six per cent to $1.624 trillion in 2025 from $1.532 trillion in 2024, ending two consecutive years of decline. However, the recovery was uneven. While investment into developed economies rose by 11 per cent, FDI flows to Africa dropped by 26 per cent to $70 billion from $94 billion recorded in 2024.
Against this backdrop, Nigeria stood out as one of the continent’s best performers, with FDI inflows rising from $1.61 billion in 2024 to $4.01 billion in 2025. The increase placed Nigeria among Africa’s leading investment destinations, ahead of Ethiopia, Morocco, Kenya, Côte d’Ivoire and Ghana, although it still trailed Egypt, Guinea and Mozambique.
Despite the strong rebound, analysts noted that Nigeria’s performance was driven largely by major transactions in the oil, gas and energy sectors, rather than broad-based investments in manufacturing and other productive sectors.
Key deals included Renaissance Africa Energy’s acquisition of Shell’s onshore assets and Huaxin Cement’s purchase of Lafarge Africa. While these transactions boosted headline investment figures, they also underscored Nigeria’s continued dependence on hydrocarbons for attracting foreign capital.
Nigeria accounted for about 5.8 per cent of Africa’s total FDI in 2025 but attracted only about 0.25 per cent of global investment flows, highlighting the significant gap between the country’s economic potential and actual investment inflows.
Globally, developed economies led the recovery, attracting $723 billion in FDI. Europe recorded the strongest regional growth, with inflows rising 39 per cent to $285 billion, while developing Asia remained the largest destination among emerging markets, receiving $644 billion.
The report also showed that Brazil alone attracted about $77 billion in FDI—more than the entire African continent—while India received $39 billion, nearly ten times Nigeria’s total inflows.
Although Africa’s overall FDI declined in 2025, UNCTAD noted that the fall was partly due to the exceptionally large Ras El-Hekma investment deal recorded by Egypt in 2024, which had inflated the previous year’s figures. Even so, Africa’s 2025 inflow remained the continent’s third-highest on record and about one-third above its 2010-2024 average.
For Nigeria, the challenge now extends beyond attracting larger volumes of foreign investment to improving its quality and economic impact. Experts say sustained growth will depend on drawing more greenfield investments into manufacturing, technology, export-oriented industries and domestic supply chains.
They also argue that while recent reforms in the foreign exchange market, fiscal policy and the petroleum sector have improved investor confidence, longstanding structural constraints – including unreliable electricity, weak infrastructure, insecurity, logistics bottlenecks, high financing costs and regulatory uncertainty – must be addressed if Nigeria is to realise its full investment potential and become a preferred destination for long-term productive capital.
