Nigeria is living a dangerous illusion.
Total capital importation soared 112% to a preliminary $13.73 billion in the first seven months of 2025. FDI itself climbed 88% to $320 million. Those numbers will make fine headlines. But the truth is colder: FDI’s share of the total actually dropped from 2.6% to 2.3%.
Translation? We have become Africa’s highest-yielding bond fund, not its most promising industrial powerhouse. More than 90% of the money that rushed in this year is portfolio money — hot, reversible, and already eyeing the exit the moment global yields shift. It is the same capital that vanished overnight in 2022–2023 when the naira went into free fall. FDI — the only capital that builds factories, trains workers, pays taxes for decades, and survives currency storms — is being crowded out.
That shrinking share is not a statistical curiosity. It is a verdict on the quality and durability of the capital we are attracting. Reserves may sit at a comfortable $46.7 billion (14 November 2025), but when 97 out of every 100 new dollars can disappear before the ink dries on the next CBN report, we are not building resilience. We are building a house of cards with imported glue.
Why do portfolio traders love us while factory builders keep walking away?
The answer is a familiar indictment:
• Factories still generate 40–50% of their own electricity at costs that destroy competitiveness before the first shift starts.
• Approvals can take two to three years, with rules rewritten mid-process by officials who were not in the room when the first promise was made.
• Large parts of the country remain no-go zones for serious industrial investment.
• Even after recent FX reforms, the scars of 2023’s 18-month repatriation queues still frighten any CEO with a fiduciary duty.
Portfolio money ignores all of that. FDI cannot.
The honest 12–24 month outlook is modest but within reach. From today’s humiliating 2.3%, FDI’s share can rise to 3.5–4.2% by end-2026 if current reforms are not derailed. Push to mid-2027 with real discipline and we can touch 4.5–5% — still far below Vietnam or Morocco, but a genuine step forward. The optimistic ceiling of 5–6.5% demands near-perfect execution over multiple quarters: rock-solid FX convertibility, permit times halved, and non-oil FDI finally breaking a third of the total. I have watched Nigerian governments deliver brilliant sprints; I have never seen them run a marathon. The pessimistic floor — back below 2.5% — arrives in weeks if oil lingers under $70 and portfolio money bolts again.
The roadmap to reverse this is short, sharp, and entirely in our hands:
1. Make FX convertibility sacred and transparent. Treat the January 2025 FX Code as non-negotiable. Publish weekly liquidity dashboards. Keep repatriation under 30 days even in December. Use the $1.5 billion World Bank facility aggressively. This alone unfreezes $1–2 billion of already-approved projects in the next twelve months.
2. Build a real one-stop shop with teeth. Digitise every approval, bind every agency to a statutory 60-day ceiling, trigger automatic approval on day 61, and put the live tracker on the Presidency website. Regulatory chaos is the second-biggest complaint after power. End it.
3. Deploy surgical, time-bound incentives in three sectors only: renewable energy, agro-processing/food manufacturing, and electric-vehicle assembly/components. Five-year tax holiday + zero duty on equipment. Nothing more, nothing less. Blanket incentives haemorrhage revenue; precision strikes create clusters and thousands of real jobs.
Do these three things in that exact order, report quarterly KPIs in newspapers and on television, and FDI can surge 60–80% year-on-year by the end of 2026. Dilute, delay, or distract, and we will gather again in 2028 to mourn the same empty factories and rehearse the same excuses.
Investment summits are not the problem; half-hearted follow-through is. Used properly, they are platforms to publish scorecards, shame laggards, and convert handshakes into shovels in the ground.
The market is here. The population is here. The resources are here. What is missing is the political courage to treat builders like VIPs and speculators like the transient guests they are.
The window is open, but it will not stay open forever. Choose factories over fleeting applause — before the music stops and we are left, once again, with nothing but the hangover.
Kunle Odusola-Stevenson is a
Public Relations and Energy, B2B Markets, Policy Advisory Analyst
