Foreign capital inflows into Nigeria's manufacturing sector experienced a sharp decline in the first quarter of 2026, even as overall capital importation into the country surged during the same period, according to data released by the National Bureau of Statistics (NBS).
Sharp Quarterly Decline
The production and manufacturing sector attracted $152.27 million in capital inflows in Q1 2026, representing just 1.47% of the total $10.37 billion imported into Nigeria. This marks a 50.7% decrease from the $308.93 million recorded in the fourth quarter of 2025.
The significant slowdown in investment directed toward industrial production and manufacturing activities raises concerns about investor appetite for productive sectors of the economy, particularly amid ongoing efforts to drive industrialization and economic diversification.
Importance of Manufacturing
Manufacturing remains a critical sector for economic diversification, employment generation, industrial development, export growth, and foreign exchange earnings. Sustained weakness in investment inflows could hinder the sector's ability to expand production capacity and improve competitiveness.
On a year-on-year basis, manufacturing inflows increased by 17.2% from $129.92 million in Q1 2025, and the sector attracted a total of $772.45 million in foreign capital throughout 2025. However, the quarterly trend shows a consistent decline, suggesting that while some foreign investment was attracted, investor interest remained significantly weaker than the broader growth seen in total capital inflows.
Overall Capital Importation
This decline in manufacturing investment occurred as Nigeria recorded a strong recovery in overall capital importation. NBS data showed total capital inflows rose to $10.37 billion in Q1 2026, an increase of 83.8% from the $5.64 billion recorded in the corresponding period of 2025.
However, much of this increase was driven by portfolio investments and other short-term capital flows rather than long-term investments in productive sectors. Portfolio investments remained the dominant source of capital inflows during the quarter, while manufacturing, agriculture, and infrastructure attracted only a tiny share of total foreign capital.
Foreign Direct Investment
Foreign Direct Investment (FDI) stood at $135.08 million, representing just 1.3% of total capital importation within the period. FDI declined by more than 62% compared to the previous quarter, despite a modest year-on-year increase.
