Portfolio inflows into Nigeria climbed to $7.09bn in the second quarter of 2026, up 18 per cent from $6.03bn in the first quarter, driven by foreign investor demand for long-term government debt securities, the Central Bank of Nigeria said in its second quarter Economic Report. The surge in portfolio investment contributed to Nigeria's financial liabilities rising to $10.84bn in Q2 from $8.36bn in Q1. Portfolio investment involves foreign investors purchasing financial assets including government bonds, treasury bills and shares.
The increase in foreign investment was accompanied by broader changes in Nigeria's financial account. Other investment liabilities climbed to $2.75bn from $1.36bn, following higher government loan drawdowns and increased currency and deposit liabilities of deposit-taking corporations. Direct investment liabilities rose to $1.15bn from $1.03bn, driven by higher reinvested earnings. Meanwhile, Nigeria's net acquisition of financial assets jumped to $12.58bn in Q2 from $6.33bn in Q1, largely due to an increase in other investment assets to $7.96bn from $3.54bn as residents increased their foreign currency and deposit holdings.
The shift in capital flows produced a significant turnaround in Nigeria's financial position. The country moved to a net lending position of $1.74bn, equivalent to 1.96 per cent of GDP in Q2, reversing a net borrowing position of $2.03bn, or 2.48 per cent of GDP, in Q1. Reserve assets increased to $3.51bn from $2.38bn, while portfolio investment assets rose to $700m from $260m as deposit-taking corporations and other sectors acquired more foreign debt securities. Direct investment assets acquired by Nigerian residents also increased to $560m from $200m, mainly driven by equity investments.
The stronger inflows occurred as Nigeria's external debt stock continued to rise. The CBN said external debt reached $54.52bn at the end of June 2026, up from $51.90bn at the end of March, representing 16.67 per cent of GDP. The $2.62bn increase between March and June was largely driven by a $1.5bn Total Return Swap with First Abu Dhabi Bank and $900m in multilateral loans from institutions such as the World Bank Group and the African Development Bank Group. Multilateral loans accounted for the largest share of Nigeria's external debt at $24.76bn or 45.42 per cent of the total, while commercial borrowings including Eurobonds and syndicated loans amounted to $23.26bn or 42.47 per cent. Bilateral loans stood at $6.61bn or 12.12 per cent.
For savers, borrowers and businesses in Nigeria, the shift to net lending and the influx of foreign portfolio investment signals renewed confidence in the country's government debt securities, though rising external debt means obligations that will require future servicing.