Nigeria’s portfolio investment rises to $7.09bn in Q2 2026 while remittance inflows hit record $1.57bn

Nigeria recorded a notable increase in foreign capital during the second quarter of 2026. Portfolio investment inflows rose 17.6% from $6.03 billion in the first quarter to $7.09 billion, according to the Central Bank of Nigeria (CBN). At the same time, inflows from international money‑transfer operators (IMTOs) reached a record $1.57 billion, a 33% year‑on‑year rise.

According to the Central Bank of Nigeria’s Q2 2026 Economic Report published on 26 October, the increase in portfolio investment was mainly attributed to greater capital flowing into long-term general government debt instruments. Portfolio inflows accounted for roughly 65% of net liabilities incurred during the quarter, outpacing direct investment, which remained a much smaller component.

Background

The CBN’s financial‑account data shows that portfolio investment has become the dominant source of new financial liabilities for Nigeria, with inflows six times larger than direct investment liabilities in the second quarter. Although portfolio capital saw an uptick, overall foreign-exchange receipts dropped by 4.24 percent, reaching $30.03 billion, down from $31.36 billion in the prior quarter, while the average Nigerian Foreign Exchange Market rate improved to N1,365.95 for every dollar, compared with N1,384.48.

Remittance inflows have also shown a strong upward trend. The CBN’s Q2 2026 Statistical Bulletin recorded $1.57 billion from IMTOs, surpassing the previous quarterly high of $1.47 billion in Q3 2024. Monthly data revealed a sharp rise in May ($472.13 million) and June ($580.16 million) 2026, offsetting an April decline. This performance follows a 45% increase in Q1 2026 IMTO inflows to $1.29 billion, itself up from $888.47 million a year earlier.

Regulatory changes have shaped this environment. In March 2026, the CBN required all IMTOs to maintain naira settlement accounts with authorised dealer banks, aiming to tighten oversight and improve FX market transparency. Earlier, in January 2024, the bank removed the cap on exchange rates quoted by IMTOs and issued revised operating guidelines.

Why it matters

The growth in portfolio investment underscores the reliance of Nigeria’s external financing on debt‑related instruments rather than direct foreign investment. With portfolio inflows representing about two‑thirds of net liabilities, shifts in investor sentiment could materially affect the country’s debt servicing capacity.

Remittances are a critical source of foreign currency for households and the broader economy. The record $1.57 billion in Q2 2026 reflects stronger diaspora contributions, which help support consumption and can alleviate pressure on the foreign‑exchange market. The CBN’s regulatory tightening aims to ensure that these inflows are channelled through transparent channels, reducing the risk of illicit flows and stabilising the FX market.

Both streams of capital influence Nigeria’s net international investment position, which narrowed to $92.94 billion in Q2 2026 from $94.68 billion, despite total financial liabilities rising by $9.71 billion to $238.66 billion.

What happens next

The CBN’s upcoming reports will likely monitor whether the strengthened portfolio inflows continue to outpace direct investment and how the regulatory framework for IMTOs impacts future remittance volumes. No specific dates for further policy adjustments were provided in the sources, but the bank’s ongoing oversight of foreign‑exchange transactions suggests continued attention to both debt‑related inflows and diaspora remittances.