Nigeria’s net foreign liability position increased by $7.5 billion to $90.2 billion in 2025 as foreign investors’ claims on Nigerian assets grew faster than the country’s investments abroad, according to the Central Bank of Nigeria (CBN).
The increase reflects stronger foreign portfolio and direct investment liabilities, partially offset by growth in Nigeria’s external reserves and higher foreign investments held by Nigerian residents.
According to the CBN’s International Investment Position (IIP) report, Nigeria’s net financial liabilities rose from $82.7 billion in 2024 to $90.2 billion in 2025. The position comprised $125.6 billion in external assets—investments owned abroad by Nigerians—and $215.8 billion in foreign liabilities, representing overseas investments in Nigerian assets.
Unlike the Balance of Payments, which tracks trade and capital flows over a specific period, the IIP measures the total stock of a country’s external financial assets and liabilities at a given point in time.
The rise in external liabilities was driven mainly by a $10.1 billion increase in portfolio investment liabilities, largely from foreign purchases of government debt instruments such as Open Market Operation (OMO) bills. The investments were encouraged by Nigeria’s high interest-rate environment, which offered attractive yields.
Direct investment liabilities also climbed by $6.7 billion year-on-year, reflecting increased foreign ownership stakes in Nigerian companies and subsidiaries, an indication of sustained investor confidence in selected sectors of the economy.
On the asset side, Nigeria’s reserve assets expanded by $5.6 billion, strengthening the country’s external buffers and improving its ability to withstand global economic shocks. Nigerian residents also increased their holdings of direct, portfolio, and other foreign assets by an additional $3.3 billion.
Despite these gains, the wider liability position underscores Nigeria’s growing dependence on foreign capital inflows. While such investments have improved foreign exchange liquidity and eased pressure on the naira, analysts warn that the heavy concentration of short-term portfolio investments leaves the economy vulnerable to sudden capital outflows if global interest rates rise or investor confidence weakens.
The increase in foreign holdings of Nigerian debt securities could also heighten pressure on the country’s foreign exchange reserves as investors repatriate interest payments or withdraw their investments.
Economists maintain that strengthening Nigeria’s external position will require attracting more long-term foreign direct investment, expanding non-oil exports, and sustaining reserve accumulation.
They also note that stronger crude oil prices could boost export earnings and foreign exchange inflows. However, reducing external vulnerability will ultimately depend on shifting from short-term, yield-driven capital inflows to productive investments that enhance economic growth and generate sustainable foreign exchange earnings.
