Nigeria's $6 Billion Capital Importation Surge: Why CPPE Warns of a Productivity Gap

 

​The Centre for the Promotion of Private Enterprise (CPPE) has issued a significant warning regarding Nigeria’s recent economic data, noting that the massive 380% year-on-year rebound in capital importation is failing to trigger real-sector productivity. While the National Bureau of Statistics (NBS) reported that total inflows soared to $6.01 billion in the third quarter of 2025—up from $1.25 billion in the same period of 2024—the CPPE, led by Dr. Muda Yusuf, argues that the "headline excitement" masks deep structural vulnerabilities. According to the economic think tank, the current surge is largely a "liquidity-driven recovery" that lacks the long-term stability needed to transform Nigeria's industrial and agricultural base.

​The Portfolio Trap: Why $6 Billion Isn't Enough

​The core of the CPPE’s concern lies in the composition of these billions of dollars. A deeper dive into the Q3 2025 data reveals that over 80% of total inflows were categorized as portfolio investments—essentially "hot money" chasing high interest rates in Nigeria’s money markets. Conversely, Foreign Direct Investment (FDI), which represents long-term commitment to infrastructure and factories, accounted for less than 5% of the total capital.

​Dr. Muda Yusuf emphasized that while portfolio investors provide necessary liquidity and help stabilize the foreign exchange market in the short term, they are notoriously volatile. These funds can be pulled out at the slightest hint of global policy shifts or domestic instability, leaving the Nigerian economy exposed to sudden "exogenous shocks." For a sustainable recovery, the CPPE insists that the narrative must shift from attracting short-term speculators to securing long-term partners who build physical assets on Nigerian soil.

​Banking vs. Manufacturing: A Sectoral Imbalance

​Another red flag raised by the CPPE is the extreme concentration of capital within the financial sector. The data shows that the banking sector alone attracted $3.14 billion (52.25% of total inflows), followed by the financing sector at $1.86 billion (30.85%). In stark contrast, the production and manufacturing sector received a mere $261.35 million, representing just 4.35% of the total capital imported.

​This imbalance means that the "rebound" is largely a financial phenomenon that does not translate into:

• ​Job Creation: Financial deepening without real-sector expansion creates few opportunities for the teeming youth population.
• ​Food Security: Marginal allocations to agro-processing leave the country vulnerable to food inflation.
• ​Export Diversification: Without capital flowing into export-oriented manufacturing, Nigeria remains tethered to oil revenue.
• ​Infrastructure Growth: Logistics, energy, and transportation—the backbones of any economy—are currently receiving only "marginal" attention from foreign investors.

​The Path to Investment-Led Transformation

​To bridge the gap between financial liquidity and real productivity, the CPPE has urged the Federal Government to accelerate structural reforms. Dr. Yusuf’s statement calls for a deliberate policy shift to incentivize capital flows into high-impact areas like mineral beneficiation, industrial parks, and climate-resilient agriculture. The goal is to move from a "liquidity-driven recovery" to an "investment-led transformation."

​The think tank also suggested diversifying Nigeria's capital sources beyond the traditional hubs of the UK, USA, and South Africa. By engaging more deeply with Gulf sovereign wealth funds and Asian institutional investors, Nigeria can build a more resilient financial buffer that isn't solely dependent on Western monetary tightening cycles. As the government navigates these complex waters, the CPPE’s message is clear: while the $6 billion figure is impressive on paper, its true value will only be measured by how many factories it opens and how many jobs it creates for Nigerians.