The Central Bank of Nigeria (CBN) has announced a significant increase in net foreign portfolio investment into Nigeria between January and August 2026. According to CBN Deputy Governor, Muhamad Sani Abdullahi, the country's foreign exchange reserves have been strengthened due to increased private sector dollars inflow, foreign portfolio investments, and diaspora remittances. This development has boosted liquidity in the foreign exchange market.
The net foreign portfolio inflows between January and August 2026 rose to $6.3 billion, with Britain making the highest foreign portfolio investment, followed by the United States of America (USA), Mauritius, The Netherlands, and South Africa. The banking and financial services sector attracted more capital importation through foreign portfolio investments into the Nigerian Exchange Group (NGX). The CBN noted that the increase in foreign portfolio investments provided a significant source of foreign exchange for the economy.
The surge in foreign portfolio investments has led to a rise in Nigeria's foreign exchange reserves to $55.5 billion. This has also stabilized the exchange rate of the naira, which traded at N1,330 to the dollar last week. The World Bank contends that net foreign exchange inflow shows the true health and balance of cross-border corporate investments, signaling a rise in investor confidence in the host country's economy.
Autonomous sources accounted for the bulk of the foreign exchange inflows recorded between January and August 2026, reducing the CBN's direct interventions in the foreign exchange market. The NGX has become the center of attraction for foreign portfolio investors due to its high double-digit returns on investments, currently standing above 59%. This has made the NGX an attractive destination for foreign portfolio investors.
Another factor drawing foreign portfolio investors into the NGX is the attractive dividends paid by some of the companies listed in the Nigerian capital market. In 2025, Dangote Cement paid a dividend of N45 per share from a profit after tax (PAT) of $730 million. Bua Foods and Guaranty Trust Bank (GTB) also paid impressive dividends during the period. The high double-digit yields in fixed income securities have also contributed to the NGX's allure.
The NGX's attractiveness to foreign portfolio investors is also attributed to the daring economic reforms embarked upon by the administration of President Bola Ahmed Tinubu. The president removed petrol subsidy in 2023 and channeled revenue into government coffers. The unification of the exchange rate of the naira and significant reforms in the foreign exchange market have resulted in an increase in the inflow of foreign portfolio and direct investments.
The increase in Nigeria's foreign reserves has been noticed by foreign investors, who are rewarding the country for the improvement. With $55.5 billion in reserves, the CBN is willing to allocate foreign exchange to foreign investors for the repatriation of their investment proceeds, reducing the risk of trapped funds. This development has commended the Federal Government for the reforms that have made the NGX the cynosure of foreign portfolio investors.
Key points
- * Nigeria's foreign portfolio investment surged to $6.3 billion between January and August 2026. * The NGX's high double-digit returns on investments and attractive dividends have drawn foreign portfolio investors. * Economic reforms, including the removal of petrol subsidy and unification of the exchange rate, have contributed to the increase in foreign portfolio investments.
