February 23, (THEWILL) — Foreign investment into Nigeria’s manufacturing sector plunged by 54.11 percent in the first nine months of 2025, even as total capital inflows into the country more than doubled year-on-year, underscoring a widening disconnect between financial market enthusiasm and real-sector investment.
Data from the National Bureau of Statistics show that Nigeria recorded a dramatic rebound in overall capital importation in 2025, but the bulk of those inflows went into short-term financial instruments rather than manufacturing or production.
Quarterly figures illustrate the scale of the rebound:
Q1 2025: $5.64bn
Q2 2025: $5.12bn
Q3 2025: $6.01bn
This brings total capital importation for the first nine months of 2025 to $16.78bn.
By contrast, in the corresponding period of 2024:
Q1 2024: $3.38bn
Q2 2024: $2.60bn
Q3 2024: $1.25bn
Total capital importation for the first nine months of 2024 stood at $7.23bn.
In Q3 2025 alone, inflows surged by 380.16 percent year-on-year, rising from $1.25bn in Q3 2024 to $6.01bn. Quarter-on-quarter, capital importation also grew by 17.46 percent, up from $5.12bn in Q2 2025.
However, a breakdown of the Q3 2025 inflows reveals a structural imbalance. Portfolio investment accounted for $4.85bn, representing 80.70 percent of the $6.01bn total capital imported during the quarter.
This indicates that most foreign investors are targeting equities, bonds, and money market instruments assets that offer liquidity and quick returns rather than committing funds to long-term productive ventures such as factories, equipment acquisition, or industrial expansion.
It is within this context that manufacturing recorded a 54.11 percent decline in foreign investment during the nine-month period, despite the headline capital inflow surge.
The slump in manufacturing FDI adds to deeper structural concerns about the sector’s role in the economy.
According to the 2025 Think Tank report by the Manufacturers Association of Nigeria (MAN), manufacturing’s contribution to Nigeria’s economy has fallen sharply over the decades:
From 29.9 percent in 1981
To 8.2 percent in 2024
The sector’s real growth has also deteriorated significantly, declining from 14.7 percent in 2014 to just 1.2 percent in 2024.
These figures highlight a prolonged weakening of industrial performance now compounded by falling foreign investment.
Nigeria is attracting capital again, but largely in forms that can exit quickly. While financial markets benefit from renewed foreign appetite, manufacturing a sector critical for job creation, value addition, and export diversification continues to struggle.
Analysts warn that unless structural constraints such as foreign exchange volatility, high energy costs, weak infrastructure, and subdued consumer demand are addressed, the country risks entrenching a growth model driven by volatile portfolio flows rather than sustained industrial development.
The 54.11 percent plunge in manufacturing investment, set against a $16.78bn capital inflow surge, captures this paradox a financial recovery that has yet to translate into productive transformation.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
