New NBS data shows investors are retreating from telecommunications, manufacturing and technology sectors, while banking continues to dominate capital inflows…..
Foreign investment in Nigeria’s telecommunications sector suffered a dramatic decline in the first quarter of 2026, raising fresh questions about investor confidence in one of the country’s most strategic industries.
New data released by the National Bureau of Statistics (NBS) shows that foreign capital imported into the telecom sector fell by 91 per cent year-on-year to just $7.24 million during the period under review.
The figure represents a sharp drop from the $80.78 million recorded in the first quarter of 2025 and an even steeper decline from the $191.57 million attracted by the sector during the same period in 2024.
According to the NBS Capital Importation Report, the telecommunications industry accounted for only 0.07 per cent of the total $10.37 billion foreign capital inflows recorded in Nigeria during the first three months of 2026.
Decline Comes Despite Telecom Tariff Increase
The development comes barely a year after regulators approved a long-awaited tariff adjustment for telecommunications operators.
In January 2025, the Nigerian Communications Commission (NCC) approved the first major tariff review for telecom operators in more than a decade.
At the time, government officials argued that the adjustment would help operators improve service quality, expand network infrastructure and attract investment into the sector.
Minister of Communications, Innovation and Digital Economy, Bosun Tijani, had maintained that the tariff increase would provide operators with additional resources to invest in infrastructure upgrades and improve connectivity across the country.
However, the latest figures suggest that the expected surge in foreign investment has yet to materialise.
Manufacturing, Trading Also Lose Investor Interest
The telecom industry was not the only sector affected by declining investor appetite.
Several productive sectors of the economy recorded weaker foreign capital inflows compared to levels seen in previous years.
Manufacturing and production attracted $152.27 million in the first quarter of 2026. While this represented an improvement over the $129.92 million recorded in the corresponding period of 2025, it remained below the $191.52 million received in 2024.
The trading sector also witnessed a significant slowdown.
Foreign investment in trade stood at $65.79 million during the quarter, compared to $494.33 million recorded during the same period in 2024, despite improving slightly from the $34.39 million received in 2025.
One of the most affected sectors was electricity.
The sector attracted only $2.7 million in foreign capital during the quarter, a sharp decline from $9.03 million in 2025 and $58.93 million in 2024.
Similarly, information technology services recorded inflows of $11.33 million, far below the $171.70 million attracted during the comparable period in 2024.
Banking Emerges as Investors’ Preferred Destination
While productive sectors struggled to attract foreign capital, banking and financial services continued to dominate investment inflows into Nigeria.
According to the NBS report, the banking sector attracted a massive $7.55 billion during the quarter, accounting for nearly three-quarters of all foreign capital imported into the country.
The financial services sector followed with $2.43 billion, representing 23.42 per cent of total inflows.
Combined, both sectors accounted for more than 96 per cent of all foreign investments entering Nigeria during the period.
The trend suggests that foreign investors are increasingly favouring financial assets and banking-related opportunities over long-term investments in sectors such as telecommunications, manufacturing, technology and infrastructure.
What the Numbers Mean
Analysts say the concentration of capital in banking and financial services may reflect investor preference for sectors perceived to offer quicker returns and lower operational risks.
The decline in investments flowing into productive sectors raises concerns about the pace of economic diversification and long-term growth prospects.
Telecommunications, manufacturing, technology and power are widely regarded as critical sectors for job creation, industrial development and economic expansion.
A sustained slowdown in foreign investment across these industries could limit their ability to expand operations, create employment opportunities and contribute meaningfully to broader economic growth.
While Nigeria recorded strong overall capital inflows during the quarter, the latest figures highlight a growing imbalance in where foreign investors are choosing to place their money.
The challenge for policymakers going forward will be creating conditions that encourage investors to channel more capital into productive sectors capable of driving sustainable economic development rather than concentrating investments primarily within the financial system.
