• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Features

Hot Money Accounts for 90% of Nigeria’s Capital Importation

3 weeks ago
in Features, highlights, Home, home-news, latest News
2 min read
0 0
0
56
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Hot Money Accounts for 90% of Nigeria’s Capital Importation

Nigeria recorded total capital inflows of $5.64 billion in Q1 2025, a 67% increase from the $3.38 billion posted in the previous quarter.

However, capital importation data from the National Bureau of Statistics (NBS) reveals that over 90% of these inflows were driven by hot money short-term speculative funds seeking high returns.

A closer look shows that $4.21 billion, or 74.6% of the total, was channelled into money market instruments, primarily OMO bills and Treasury Bills both short-term securities issued by the Central Bank of Nigeria to manage liquidity.

These instruments have become increasingly attractive to foreign investors amid Nigeria’s elevated interest rate environment, forming the core of capital inflows aimed more at stabilising the naira than funding long-term economic activity.

Central Bank’s hawkish policy attracting hot money 

The surge in money market inflows comes on the back of the Central Bank of Nigeria’s hawkish monetary policy, which has seen benchmark interest rates rise to record highs.

The CBN has used elevated interest rates as a tool to attract foreign portfolio investors, boost dollar supply, and stabilise the naira.

RelatedPosts

Top 10 African Countries With the Strongest Currencies in August 2025

How Crypto Engagement is Finding a Place in Everyday African Life

Cyber Security Authority Warns of Rising Google Maps Brand Impersonation Scams

Foreign investors are allowed to participate in the money market through the purchase of OMO Bills, a powerful tool the CBN has deployed to attract FX inflows without directly raising public debt.

With yields on OMO bills and Treasury Bills reaching as high as 18–25%, foreign investors are responding aggressively, pushing capital importation to its highest level since Q1 2020.

Portfolio dominates, FDI remains weak 

The breakdown of Q1 capital imports shows that portfolio investments alone accounted for $5.2 billion, or 92.2% of the total inflows, reflecting Nigeria’s continued reliance on short-term capital to manage its external imbalances.

Within this segment: 

  • $4.21 billion went into money market instruments
  • $877.41 million was invested in government bonds
  • $117.33 million came in through equity investments

By contrast, Foreign Direct Investment (FDI) stood at only $126.29 million, representing just 2.2% of total capital imports.

The bulk of FDI came through equity investments in Nigerian companies, indicating marginal interest from long-term investors.

In addition, Nigeria attracted $311.17 million in foreign loans, classified under Other Investment.

Impact on the naira 

The naira has recorded relative stability in recent weeks, trading below N1,550/$ in the parallel market, a significant appreciation from its lows earlier in the year.

Analysts believe that the increased inflow of foreign portfolio capital, driven by high yields on CBN securities, has helped boost dollar liquidity and ease exchange rate pressure.

However, there are concerns about the sustainability of this model. Portfolio flows, especially into money market instruments, are typically volatile and subject to rapid reversals if global conditions change or policy credibility falters.

Bottom line 

While Nigeria has succeeded in attracting capital inflows to support the naira, the structure of these inflows suggests a heavy dependence on hot money, rather than productive capital.

The CBN’s use of high-yielding instruments has so far worked in stabilising the foreign exchange market, but the country remains vulnerable to external shocks and capital flight.

For long-term stability, analysts have often argued that Nigeria needs to rebuild investor confidence, improve the ease of doing business, and attract more sustainable capital, especially FDI that supports growth, jobs, and innovation.

Tags: Hot Money Accounts for 90% of Nigeria’s Capital Importation

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

No Result
View All Result

Highlights

Fuel Prices to Rise From Monday Despite Fall in Global Oil Prices

Alcaraz Dominates to Reach Fourth Round at US Open; Rybakina Advances as Raducanu Falls

CHAN 2024: Senegal Edges Sudan on Penalties to Claim Third Place

Lands Minister Initiates Repeal of L.I. 2462 to Protect Reserves and Combat Galamsey

Ghana Link Assures Stakeholders of Major ICUMS Upgrade to Address Downtime Concerns

Troubled Manchester United Boss Amorim Contemplates Future After Grimsby Debacle

Trending

Business

Top 10 African Countries With the Strongest Currencies in August 2025

August 30, 2025

Top 10 African Countries With the Strongest Currencies in August 2025 In an interconnected world where economies...

How Crypto Engagement is Finding a Place in Everyday African Life

August 30, 2025

Cyber Security Authority Warns of Rising Google Maps Brand Impersonation Scams

August 30, 2025

Fuel Prices to Rise From Monday Despite Fall in Global Oil Prices

August 30, 2025

Alcaraz Dominates to Reach Fourth Round at US Open; Rybakina Advances as Raducanu Falls

August 30, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.