By Ajibola Olaide, JKNewsMedia Correspondent
SHARP DECLINES in capital inflows marked the first quarter of 2025, as the Central Bank of Nigeria (CBN) reported a steep drop in both direct and portfolio investments.
The contraction signalled growing investor caution and intensified external pressures, triggering widespread pullback across financial commitments.
According to the CBN’s Balance of Payments report for Q1 2025, direct investment into Nigeria dropped by 19.35 percent, plunging to $250 million from $310 million recorded in Q4 2024.
Portfolio investments also witnessed a dramatic reversal, with liabilities registering a net divestment of $5.03 billion—a stark contrast from the inflows previously recorded.
Total financial account balance slipped to $7.58 billion in Q1 2025, compared to $7.82 billion in the preceding quarter. This was primarily driven by sweeping reductions across portfolio and other investment liabilities.
The apex bank noted that other investment liabilities reversed by $4.32 billion during the quarter, while other investment assets marked an outflow of $1.31 billion, shifting from a reversal of $1.54 billion in Q4 2024.
On offshore Nigerian investments, direct investment assets abroad posted a reversal of $0.55 billion, while portfolio assets abroad recorded outflows amounting to $0.48 billion.
These figures reveal a broader trend of capital movement out of Nigeria amid persistent economic uncertainties.
The nation’s external reserves also took a hit, shrinking by $2.37 billion in just three months. As of March 2025, reserves stood at $37.82 billion, down from $40.19 billion at the end of December 2024.
