CBN data show stronger foreign investment in government debt securities lifted portfolio inflows, while total foreign exchange receipts declined during the quarter……..
Nigeria’s portfolio investment inflows climbed to $7.09 billion in the second quarter of 2026, representing a 17.6% increase from the $6.03 billion recorded in the preceding quarter, as foreign investors increased their exposure to long-term government debt securities.
The Central Bank of Nigeria (CBN) disclosed this in its Q2 2026 Economic Report, published on Monday, October 26, attributing the $1.06 billion increase to higher inflows into long-term general government debt instruments.
The latest figures reinforce the dominance of portfolio investment in Nigeria’s financial account, with inflows exceeding direct investment liabilities and other investment-related liabilities during the period.
The report also showed that the total net incurrence of financial liabilities rose to $10.84 billion in the second quarter from $8.36 billion in the first quarter, reflecting increased foreign financing across several investment categories.
The CBN’s financial account data showed that portfolio investment recorded stronger growth than direct investment liabilities between January and June 2026.
Portfolio inflows rose from $6.03 billion in the first quarter to $7.09 billion in the second quarter, an increase of $1.06 billion or 17.6%.
Direct investment liabilities also increased, rising to $1.15 billion from $1.03 billion, representing an increase of $120 million, or approximately 11.7%. The central bank attributed the growth largely to higher reinvested earnings.
Other investment liabilities recorded a more substantial increase, climbing to $2.75 billion from $1.36 billion in the preceding quarter.
According to the report, the increase reflected higher loan drawdowns by the government and other sectors, alongside growth in currency and deposit liabilities held by deposit-taking corporations.
Consequently, total net financial liabilities incurred during the quarter increased to $10.84 billion from $8.36 billion in Q1.
Portfolio investment accounted for approximately 65% of the total in Q2, compared with about 72% in the preceding quarter, as other investment liabilities expanded more rapidly.
The figures indicate that portfolio investment remained the largest source of recorded financial liabilities, even as other forms of foreign financing gained ground.
The rise in portfolio investment came amid a decline in Nigeria’s aggregate foreign exchange inflows during the second quarter.
According to the CBN, total FX inflows fell by 4.24% to $30.03 billion from $31.36 billion in the first quarter, reflecting contrasting movements in autonomous receipts and inflows through the central bank.
Autonomous foreign exchange inflows, which comprise receipts outside the CBN’s direct channels, increased by 3.59% to $21.91 billion.
However, inflows through the CBN declined by 20.47% to $8.12 billion, offsetting the increase recorded in autonomous sources.
The country’s financial account also recorded net lending of $1.74 billion in Q2, reversing the net borrowing position of $2.03 billion reported in the previous quarter.
The CBN linked the shift mainly to increased acquisition of other investment and reserve assets.
Meanwhile, Nigeria’s external reserves rose to $51.39 billion at the end of June 2026, compared with $48.35 billion at the end of March.
The average exchange rate at the Nigerian Foreign Exchange Market (NFEM) also strengthened to N1,365.95 per dollar from N1,384.48 per dollar in the preceding quarter.
Nigeria’s net international investment liability narrowed to $92.94 billion from $94.68 billion, although total financial liabilities increased by $9.71 billion to $238.66 billion.
The latest figures highlight the growing importance of portfolio investment in Nigeria’s recorded cross-border financial flows, while underscoring the comparatively smaller contribution of direct investment liabilities.
Portfolio investments typically involve financial securities, including government bonds and other debt instruments, while direct investment represents a different category of cross-border investment.
The distinction is important because an increase in portfolio inflows does not necessarily translate into an equivalent rise in long-term investment in productive assets, such as factories, infrastructure or new business operations.
Portfolio investments can support demand for government securities and contribute to foreign exchange liquidity, but their behaviour may also differ from that of direct investments.
The CBN’s balance-of-payments figures should also be distinguished from capital importation statistics published by the National Bureau of Statistics, as the two datasets measure different aspects of cross-border financial activity.
With portfolio investment continuing to account for the largest share of newly incurred financial liabilities, the composition of foreign capital flows remains a key consideration in assessing Nigeria’s external financing position.
The second-quarter performance therefore points to stronger portfolio inflows, even as overall foreign exchange receipts weakened and other investment liabilities expanded at a faster pace.
