While much of Africa was taking a step back on foreign investment last year, Nigeria went in the opposite direction. The country pulled in US$4.01 billion in foreign direct investment in 2025, up from US$1.61 billion in 2024. Across Africa, FDI fell from US$94 billion to about US$70 billion.

That pushed Nigeria back into Africa’s top five FDI destinations and gave the country its strongest annual inflow since 2014.

But the headline number does not tell the whole story. A large share of the new investment was linked to oil and gas projects, raising a more important question for Nigerian businesses: can the latest wave of foreign capital create opportunities beyond the projects that attracted it?

Where the money is going

Energy remains a major part of Nigeria’s investment appeal. The 2025 FDI increase was supported by international project finance deals in oil and gas, including a project valued at about US$2 billion.

Nigeria’s wider energy trade also strengthened during the year. Gas exports rose 21.4 percent to US$10.51 billion, while refined petroleum exports reached US$6.13 billion, helped by the Dangote refinery.

For local businesses, the significance goes beyond the value of the projects themselves. Large investments can create demand for Nigerian companies providing engineering, construction, transport, equipment, professional services and other supplies.

The opportunity is whether more local businesses can move into those supply chains instead of watching the biggest benefits remain with the foreign investors and their international suppliers.

Nigeria also has opportunities outside oil and gas. UN Trade and Development identified energy infrastructure, critical minerals, logistics, renewable energy and selected manufacturing activities among sectors attracting investment across Africa.

Nigeria is not the only option

The stronger FDI numbers do not mean investors have suddenly stopped looking elsewhere. Egypt attracted about US$15 billion in FDI in 2025, while Guinea and Mozambique also ranked ahead of Nigeria. The country placed fourth among Africa’s leading destinations with its US$4.01 billion inflow.

The competition is becoming more intense because investors are increasingly concentrating their money in strategic industries and large projects.

Africa’s total FDI may have declined in 2025, but UNCTAD said the continent still attracted its third-highest annual inflow since 1990, at about one-third above its long-term average.

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The continent is also sitting on resources that are becoming increasingly valuable to global supply chains, including lithium, cobalt, copper, manganese and graphite.

For Nigeria, having a large consumer market and substantial energy resources is an advantage, but it is not enough on its own. Investors still need infrastructure, reliable logistics, skilled workers and an environment in which businesses can plan beyond the next few months.

The money coming in is only half the story

Nigeria’s investment figures become more interesting when compared with another capital flow. While FDI rose sharply in 2025, foreign portfolio investment fell by 48.3 percent to US$8.04 billion, from US$15.55 billion.

That difference matters. Portfolio investment is generally more mobile, while FDI is associated with longer term investment in businesses and productive assets. So, Nigeria ended 2025 attracting more long term foreign investment even as foreign portfolio flows weakened.

The challenge now is making that investment count beyond the headline figure. If new foreign projects create Nigerian suppliers, train workers, transfer technology and expand local manufacturing and services, the impact can spread much further than the original investment.

Nigeria has managed to attract more foreign capital at a time when Africa’s overall inflows declined. The next question is whether Nigerian businesses can turn that capital into something bigger than a good FDI number.

Meiza Nigeria