Nigeria’s $10.37bn capital inflows mask weak FDI — PwC

Nigeria’s economic reforms have delivered stronger macroeconomic indicators, but the gains are yet to translate into broad-based prosperity, with capital inflows rising 83.8 per cent to $10.37 billion in the first quarter of 2026, even as foreign direct investment accounted for only 1.3 per cent of the inflows and poverty is projected at 63 per cent this year.

The latest PwC H2 2026 Nigeria Economic Outlook showed that the country’s macroeconomic stabilisation had produced significant improvements in foreign exchange liquidity, reserves, inflation and economic growth, but structural constraints, high financing costs and weak household purchasing power were limiting the conversion of these gains into inclusive growth.

The report showed that real Gross Domestic Product grew by 3.89 per cent year-on-year in Q1 2026, up from 3.13 per cent in Q1 2025, while headline inflation moderated to 15.91 per cent in June.

The naira also strengthened to ₦1,379.68/$ in June from ₦1,529.70/$ previously, while foreign exchange reserves climbed 38.3 per cent year-on-year to $51.46 billion. Market capitalisation rose 93.8 per cent year-on-year to ₦147.2 trillion.

However, the report warned that improved macroeconomic stability had not yet translated into stronger household welfare.

Food inflation rose to 17.52 per cent in June from 16.96 per cent in May, while the cost of a healthy diet increased by 4.68 per cent year-on-year to ₦1,589 per adult per day in April. Buying conditions for consumer durables, motor vehicles and property also remained weak in June.

The sharp increase in capital importation was largely driven by foreign portfolio investors rather than long-term investors.

Of the $10.37 billion in capital imported in Q1, portfolio investment accounted for $9.86 billion, representing 95.1 per cent of total inflows,…