Foreign investment in manufacturing plunges 54%

Foreign investment in manufacturing plunges 54%

Foreign investment into Nigeria’s production and manufacturing sector fell sharply by 54.11% in the first nine months of 2025, dropping to $463.52 million from $1.01 billion in 2024, according to the National Bureau of Statistics. This decline occurred despite a 131.96% rise in total capital importation, which increased to $16.78 billion in 2025 from $7.23 billion in 2024.

Most of the capital inflows in 2025 went into short-term financial investments. In Q3 2025, portfolio investment accounted for over 80% of total inflows, while Foreign Direct Investment made up less than 5%. The banking and financing sectors attracted the largest share of funds, while manufacturing received only a small portion.

Stakeholders, including the Lagos Chamber of Commerce and Industry and the Manufacturers Association of Nigeria, expressed concern that the growth in capital inflows is driven mainly by short-term financial gains rather than long-term industrial investment. They blamed weak infrastructure, unreliable electricity, high production costs, foreign exchange challenges, and policy uncertainty for discouraging manufacturing investment.

Experts warned that although rising portfolio inflows may support economic stability, Nigeria risks relying too much on volatile financial flows without strengthening its industrial base. In response, the Federal Government has launched the Nigeria Industrial Policy 2025 to encourage investment and boost the real sector.

Punch, 23 Feb 2026