Foreign Investment in Manufacturing Falls 54% Despite Capital Surge

Foreign investment in Nigeria’s manufacturing sector fell 54.11% in the first nine months of 2025, despite a sharp rebound in overall capital inflows, according to National Bureau of Statistics (NBS) data.

The sector attracted just $463.52m, down from $1.01bn in the same period of 2024. By contrast, total capital importation surged 131.96% year-on-year to $16.78bn, driven mainly by portfolio investments.

Manufacturing inflows were weak across all quarters: $129.92m in Q1, $72.25m in Q2, and $261.35m in Q3. This compared unfavourably with $191.92m, $624.71m, and $189.22m respectively in 2024.

In Q3 2025 alone, capital importation jumped 380% to $6.01bn, with portfolio investment dominating at 80.7%. Banking and financing sectors absorbed most inflows, while manufacturing accounted for just 4.35%.

Stakeholders warned that Nigeria’s recovery is being driven by short-term financial flows rather than long-term productive investment. LCCI President Leye Kupoluyi said, “This contrast highlights a recovery driven mainly by short-term financial flows, rather than by long-term productive investment, and it carries both encouraging and troubling implications.”

Kupoluyi noted that investors responded positively to monetary reforms and attractive yields in financial instruments but remained wary of the real sector due to high production costs, unreliable electricity, logistics inefficiencies, and volatile input prices.

The Manufacturers Association of Nigeria added that the sector’s contribution to GDP has fallen from 29.9% in 1981 to just 8.2% in 2024, with over 767 factories shutting down by 2023 and 18,000 job losses in 2024. Infrastructure deficits estimated at $13tn were cited as a major deterrent.

To reverse the trend, the Federal Government launched the Nigeria Industrial Policy 2025, which aims to raise manufacturing’s GDP share to 15% by 2030 and 25% by 2035 through fiscal, monetary, export, and industrial incentives.