Nigeria’s net foreign liability position widened to $90.2 billion in 2025, up from $82.7 billion in 2024, as foreign claims on Nigerian assets increased faster than the country’s investments abroad.
Data from the Central Bank of Nigeria’s International Investment Position showed that Nigerian residents held $125.6 billion in foreign assets at the end of 2025, while foreign investors held $215.8 billion in Nigerian liabilities. The gap between both positions left the country with net foreign liabilities of $90.2 billion.
The increase does not automatically mean Nigeria took on $90.2 billion in new debt. The International Investment Position captures the stock of financial assets Nigerians own abroad and the financial claims foreigners hold in Nigeria at a particular point in time. It includes direct investments, portfolio investments, reserves, and other financial assets and liabilities.
Portfolio Investors Are Driving More Foreign Exposure
The sharp rise in portfolio liabilities is particularly important because portfolio capital can move quickly.
Foreign investors have been attracted to Nigerian fixed-income securities by high interest rates and improving conditions in the foreign exchange market. These flows can boost dollar liquidity, support the naira, and deepen demand for government and central bank securities.
But portfolio flows can also reverse rapidly.
If international interest rates become more attractive elsewhere, investors become concerned about the naira, or sentiment towards emerging markets deteriorates, foreign investors can sell Nigerian assets and move their capital out.
That makes portfolio investment fundamentally different from foreign direct investment in factories, infrastructure, or operating businesses, where investors generally commit capital for longer periods.
The increase in Nigeria’s foreign liabilities is therefore not necessarily a sign of financial distress. What matters is how much of the exposure comes from stable, long-term investment compared with capital that could leave quickly when market conditions change.
Foreign Direct Investment Is Also Rising
The $6.7 billion increase in direct investment liabilities provides a more encouraging signal.
Direct investment liabilities represent foreign ownership and investment positions in Nigerian businesses. An increase can indicate that international investors are putting more capital into companies operating in the country or that the value of their existing investments has grown.
For Nigeria, which has spent years trying to attract more productive foreign capital, stronger direct investment could support business expansion, employment, industrial capacity and technology transfer.
The challenge is sustaining those investments beyond periods of favourable financial conditions.
Foreign investors still consider issues including energy costs, infrastructure, regulatory stability, exchange-rate risk and access to foreign exchange when deciding whether to commit long-term capital to Nigeria.
A stronger direct investment position therefore becomes more valuable if the capital is concentrated in productive sectors capable of expanding the country’s economic capacity.
What This Means for Nigeria
The rise to $90.2 billion should not be interpreted simply as Nigeria owing foreigners more money.
Some of the increase represents foreign investors buying Nigerian securities, while another part represents larger foreign ownership positions in Nigerian companies. Those investments can bring capital into the economy and strengthen foreign exchange supply.
The concern lies in the composition.
The $10.1 billion jump in portfolio liabilities was larger than the increase in direct investment liabilities, showing the growing importance of foreign investors seeking returns from Nigerian financial assets.
That capital can be useful, particularly when Nigeria needs foreign exchange liquidity. But an external position heavily influenced by portfolio investment becomes more sensitive to changes in interest rates, exchange-rate expectations and global investor sentiment.
Nigeria therefore has to convert the current improvement in foreign investor appetite into a deeper shift towards long-term capital.
What You Should Know
Nigeria’s net foreign liabilities increased by about $7.5 billion year on year, with portfolio investment and direct investment accounting for much of the movement.
Portfolio investment liabilities increased by $10.1 billion, driven largely by foreign demand for Nigerian debt securities, including Open Market Operation bills. High domestic interest rates created attractive returns for international investors looking to benefit from the difference between yields in Nigeria and those available in lower-interest-rate markets.
Direct investment liabilities also increased by $6.7 billion, indicating that foreign investors increased their ownership positions and investments in Nigerian businesses and subsidiaries.
The numbers therefore tell a more complicated story than the headline liability figure suggests. A larger foreign liability position can reflect greater foreign investment in an economy, but the type of capital entering the country determines how stable and beneficial those inflows m
What Kind of Capital Nigeria Is Attracting
Nigeria’s external position is improving in some areas at the same time that its foreign liabilities are rising.
That is not necessarily contradictory.
Foreign investors increasing their exposure to Nigerian businesses and financial markets can strengthen capital inflows, support the currency and signal renewed confidence in the economy. At the same time, those investments increase the claims foreigners hold on Nigerian assets.
The more important measure is whether the country can use the current period of stronger investor interest to attract capital that stays longer and finances productive growth.
High interest rates can attract billions of dollars into Nigerian securities, but those flows depend heavily on market conditions. Investment in manufacturing, energy, technology, infrastructure, and other productive industries is harder to attract but tends to have a more lasting economic impact.
Nigeria’s $90.2 billion net foreign liability position therefore tells two stories at once: foreign investors are increasing their exposure to the country, but Nigeria is also becoming more exposed to the decisions those investors make.
How much of that foreign capital becomes long-term investment will determine whether the rising liability position becomes a source of economic strength or a vulnerability when global conditions change.
