Nigeria’s manufacturing sector recorded a sharp decline in foreign capital inflows in the first quarter of 2026, despite a strong increase in overall capital importation into the country during the period.
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According to data released by the National Bureau of Statistics (NBS), the production and manufacturing sector attracted $152.27 million in capital inflows during Q1 2026, accounting for just 1.47% of the total $10.37 billion capital imported into Nigeria during the quarter.
The figure represents a 50.7% decline from $308.93 million recorded in Q4 2025.
The latest figure represents a significant slowdown in investment directed toward industrial production and manufacturing activities, raising concerns about investor appetite for productive sectors of the economy amid ongoing efforts to drive industrialisation and economic diversification.
What the data is saying
The NBS data shows that foreign capital inflows into Nigeria’s manufacturing sector declined significantly on a quarterly basis, even though the sector recorded modest growth compared to the corresponding period last year.
- On a year-on-year basis, manufacturing inflows increased by 17.2% from $129.92 million in Q1 2025.
- The sector accounted for only 1.47% of the total $10.37 billion capital imported into Nigeria during the quarter.
- Manufacturing attracted a total of $772.45 million in foreign capital throughout 2025.
The figures suggest that while manufacturing continues to attract foreign investment, investor interest in the sector remains significantly weaker than the broader growth seen in total capital inflows.
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The decline in manufacturing investment comes at a time when Nigeria is recording 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 the 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.
- Manufacturing, agriculture, and infrastructure attracted only a small share of total foreign capital.
- Foreign Direct Investment (FDI) stood at $135.08 million, representing just 1.3% of total capital importation.
- FDI declined by more than 62% compared to the previous quarter despite a modest year-on-year increase.
Manufacturing remains one of the most important sectors for economic diversification, employment generation, industrial development, export growth, and foreign exchange earnings. As a result, sustained weakness in investment inflows could affect the sector’s ability to expand production capacity and improve competitiveness.
What you should know
- Manufacturers continue to face high energy costs, infrastructure deficits, logistics bottlenecks, and rising borrowing costs.
- Foreign exchange volatility remains a key concern for many investors and manufacturers.
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