Foreign Investors Pull N266bn from Nigerian Equities as Capital Outflows Hit Three-Year High

Foreign investors withdrew a net N266.07 billion from Nigeria’s equities market in the first seven months of 2026, marking the sharpest capital outflow recorded over the past three years and raising fresh concerns about investor confidence.

Data from the Nigerian Exchange Limited (NGX) showed that foreign portfolio investors brought N513.36 billion into the market between January and July but pulled out N779.43 billion, leaving a significant deficit. The widening gap suggests that attracting foreign capital is no longer Nigeria’s only challenge — keeping investors in the market has become equally important.

The situation has worsened significantly since 2023. Foreign investors recorded a net outflow of N22.68 billion in the first seven months of that year. The figure rose to N64.72 billion in 2024 before easing slightly to N61.83 billion in 2025. By July 2026, however, the net outflow had surged to N266.07 billion.

The development came despite strong growth in overall activity on the Nigerian Exchange. Total market transactions reached about N11.98 trillion between January and July 2026, almost double the N6.01 trillion recorded during the same period in 2025. Much of that growth, however, was driven by domestic investors.

Foreign outflows exceeded inflows in every month from January to July. March recorded the largest monthly deficit, with N107.05 billion entering the market and N181.77 billion leaving it. July recorded the weakest foreign inflow of the year at N41.59 billion, while investors withdrew N91.03 billion.

Managing Director of Highcap Securities Limited, David Adonri, said Nigeria still needed stronger foreign participation because of the liquidity and wider economic benefits international investors bring. He noted, however, that some of the withdrawals could be linked to investors taking profits and repatriating dividends after the sustained rally in Nigerian equities.

“FPI, unlike Foreign Direct Investment, FDI, is not a static capital,” Adonri said. “It is the working capital that foreign investors employ to trade, which they move from market to market.”

President of the Chartered Institute of Stockbrokers, Fiona Ahimie, said the rising outflow remained a concern because it showed that foreign investors were still cautious about holding Nigerian equities for the long term. She said domestic investors had helped keep the market active but warned that the absence of large foreign pools of capital could affect market depth and liquidity.

Ahimie said Nigeria must focus on making its market attractive enough for foreign investors to stay, citing the need for policy consistency, predictable regulations, stronger corporate governance and deeper market liquidity. She also pointed to inflation and uncertainty around capital gains tax as issues requiring greater clarity.

Market analyst Tajudeen Olayinka said foreign investors had not completely abandoned Nigeria’s capital market but were increasingly favouring fixed-income securities, where attractive yields on Federal Government bonds and Treasury bills offer strong short-term returns.

The growing foreign capital outflow leaves policymakers with a critical task: ensuring that Nigeria’s improving macroeconomic indicators translate into an investment environment strong enough to retain international investors and support long-term market growth.