Foreign investors channelled $3.23bn into Nigerian bonds in the first quarter of 2026, highlighting a strong appetite for the country’s fixed-income securities amid elevated interest rates and improving confidence in the foreign exchange market.
Data from the latest capital importation report released by the National Bureau of Statistics showed that bond investments accounted for 32.71 per cent of the $9.86bn portfolio investments recorded during the quarter and 31.10 per cent of the total $10.37bn capital imported into the country.
The bond inflow represented a 267.67 per cent increase from the $877.41m recorded in the corresponding period of 2025 and a 63.76 per cent rise from the $1.97bn attracted in the preceding quarter.
The surge in bond inflows came as total capital importation rose to $10.37bn in Q1 2026, an increase of 83.83 per cent from the $5.64bn recorded a year earlier and 60.97 per cent higher than the $6.44bn posted in the fourth quarter of 2025.
The report showed that portfolio investment remained the dominant investment category, attracting $9.86bn and accounting for 95.09 per cent of all capital imported during the quarter.
Within the portfolio investment segment, money market instruments led with $6.50bn, representing 65.95 per cent of portfolio inflows, while bonds followed with $3.23bn.
Equity investments remained subdued at $131.81m, accounting for just 1.34 per cent of portfolio investment.
The NBS noted, “Portfolio Investment ranked top with $9.86bn, accounting for 95.09 per cent, followed by Other Investment with $374.48m, accounting for 3.61 per cent. Foreign Direct Investment recorded the least with $135.08m.”
An analysis of the data showed that bonds recorded the fastest growth among the major portfolio investment components. While equity inflows increased by only 12.34 per cent year-on-year and money market investments rose by 54.51 per cent, bond inflows surged by 267.67 per cent, highlighting investors’ preference for longer-dated fixed-income instruments.
The sharp increase reflects the attractiveness of Nigerian sovereign debt instruments, which have offered among the highest yields in emerging and frontier markets following the Central Bank of Nigeria’s aggressive monetary-tightening cycle over the past two years.
Since assuming office in September 2023, CBN Governor Olayemi Cardoso has led the Monetary Policy Committee through one of the most aggressive tightening cycles in Nigeria’s history, raising the Monetary Policy Rate from 18.75 per cent to a peak of 27.50 per cent through a series of hikes in 2024 aimed at curbing inflation, stabilising the naira and restoring investor confidence.
After holding the benchmark rate at 27.50 per cent throughout most of 2025, the MPC began a cautious easing cycle in September 2025, cutting the MPR by 50 basis points to 27.00 per cent as inflation moderated for several consecutive months, before lowering it further to 26.50 per cent in early 2026.
At its most recent 305th meeting in May 2026, the MPC opted to retain the MPR at 26.50 per cent and leave all other key policy parameters unchanged, citing renewed inflationary pressures linked to global energy market disruptions while seeking to preserve the macroeconomic gains achieved through earlier tightening measures.
The NBS report further showed that the banking sector attracted the largest share of total capital inflows at $7.55bn, or 72.79 per cent, followed by the financing sector with $2.43bn, or 23.42 per cent.
By source country, the United Kingdom accounted for the largest share of capital importation at $5.08bn, or 49.01 per cent, followed by the United States with $3.18bn, or 30.69 per cent, and South Africa with $983.83m, or 9.49 per cent.
The figures suggest that foreign investors are increasingly deploying funds into Nigerian debt securities, betting on attractive yields and improved foreign exchange liquidity, even as foreign direct investment remained weak at just $135.08m, representing 1.30 per cent of total capital inflows during the quarter.
The Federal Government borrowed N2.69tn from the domestic bond market in the first quarter of 2026, as strong investor demand continued to drive subscriptions above offer levels despite tighter allotments.
