Manufacturing capital inflows drop 51% in Q1

Nigeria's manufacturing sector experienced a significant downturn in foreign capital inflows during the first quarter of 2026, despite a surge in overall capital importation into the country. The production and manufacturing sector attracted only $152.27 million, a 50.7% decrease from the $308.93 million recorded in the fourth quarter of 2025.

This decline represents a weaker investor appetite for industrial production, although inflows were 17.2% higher year-on-year compared to the first quarter of 2025. Overall capital importation into Nigeria reached its strongest level in recent periods, soaring 83.8% year-on-year to $10.37 billion. This growth was primarily driven by portfolio investments and other short-term capital, rather than long-term productive investments.

Foreign Direct Investment (FDI) also saw a decline, falling by over 62% from the previous quarter to $135.08 million, accounting for just 1.3% of total inflows. While manufacturing attracted $772.45 million in 2025, its performance in the first quarter of 2026 highlights ongoing struggles.

Industry stakeholders point to persistent structural challenges as major deterrents to long-term capital. These include high energy costs, inadequate infrastructure, logistics bottlenecks, elevated borrowing costs, and foreign exchange volatility. These factors continue to weigh heavily on investor sentiment and hinder the sector's ability to attract the necessary funding for expansion and job creation.

The data underscores a significant imbalance: while overall foreign capital into Nigeria is rising sharply, the manufacturing sector struggles to secure the long-term funding essential for industrial growth, economic diversification, and job creation. Calls for stronger policy support to attract capital into productive sectors remain a key demand from industry players.