By Ayo Kehinde
Nigeria’s manufacturing sector recorded a sharp decline in foreign capital inflows in Q1 2026, even as total capital importation into Nigeria surged to its strongest level in recent periods.
Data released by the National Bureau of Statistics shows that the production and manufacturing sector attracted $152.27 million, accounting for 1.47 percent of the $10.37 billion total capital imported during the quarter.
This represents a 50.7 percent decline from $308.93 million recorded in Q4 2025, highlighting weaker quarterly investor appetite for industrial production.
However, inflows were 17.2 percent higher year-on-year compared to $129.92 million in Q1 2025, indicating modest annual improvement.
Total capital importation rose by 83.8 percent year-on-year from $5.64 billion in Q1 2025, driven largely by portfolio investments and other short-term inflows rather than long-term productive capital.
Portfolio investments remained the dominant driver of inflows during the quarter, while manufacturing, agriculture, and infrastructure collectively attracted only a small portion of total foreign capital.
Foreign Direct Investment stood at $135.08 million, representing 1.3 percent of total inflows and marking a decline of more than 62 percent from the previous quarter despite a slight year-on-year increase.
Manufacturing attracted a total of $772.45 million in 2025, underscoring its continued importance despite volatile quarterly performance.
The decline comes amid persistent structural challenges including high energy costs, infrastructure gaps, logistics constraints, elevated borrowing costs, and foreign exchange volatility, which continue to weigh on investor sentiment.
Industry stakeholders have repeatedly called for stronger policy support to attract long-term capital into productive sectors and support Nigeria’s industrialisation drive.
Overall, the data underscores a continued imbalance between rising portfolio-driven inflows and weak investment in the real sector. While foreign capital into Nigeria is increasing sharply, manufacturing continues to struggle to attract the long-term funding needed to support industrial expansion, job creation, and economic diversification.
