Stock Market Foreign Investment Outflow Nigeria 2025

Foreign Outflows Surge by 13.2% to N45.85 Billion, Raising Liquidity Concerns

The Nigerian stock market witnessed a significant net foreign investment outflow of N20.19 billion in January 2025, posing potential liquidity challenges. Data from the Nigerian Exchange Limited (NGX), analyzed by Vanguard, indicates that foreign outflows surged to N45.85 billion, surpassing the foreign inflow of N25.66 billion.

Decline in Foreign Inflow and Increase in Foreign Outflow

The data further reveals that foreign inflows into the stock market declined slightly by 2.3% in January 2025, dropping from N26.26 billion recorded in December 2024. On the other hand, foreign outflows increased by 13.2%, rising from N40.49 billion in December 2024 to N45.85 billion in January 2025.

A year-on-year (YoY) comparison highlights an even more striking trend. In January 2025, foreign outflows exceeded foreign inflows by a substantial 190.6%, with foreign outflows standing at N45.85 billion compared to N15.78 billion in January 2024.

This growing capital flight poses a threat to Nigeria’s efforts to stabilize the Naira and boost foreign reserves, as investors continue to convert local currency into dollars for repatriation to more favorable investment destinations.

Decline in Total Market Transactions

NGX data also show that as of January 31, 2025, total market transactions declined by 9.89%, falling from N673.66 billion (approximately $438.64 million) in December 2024 to N607.05 billion (about $410.84 million) in January 2025. When compared to January 2024, the overall transaction volume in January 2025 saw a 6.83% decline.

Domestic investors accounted for approximately 76% of the total transactions in January 2025, surpassing the volume of trades executed by foreign investors.

Domestic Market Performance and Institutional vs. Retail Investors

A closer look at domestic transactions between December 2024 and January 2025 shows an 11.71% decline, dropping from N606.91 billion in December to N535.54 billion in January. However, foreign transactions saw a 7.13% increase, climbing from N66.75 billion (about $43.47 million) to N71.51 billion (about $48.38 million) within the same period.

Retail investors showed a notable uptick in participation, with transactions increasing by 33.10%, from N200.87 billion in December 2024 to N267.35 billion in January 2025. In contrast, institutional investments declined sharply by 33.95%, falling from N406.04 billion in December 2024 to N268.19 billion in January 2025.

Conclusion and Market Outlook

The rising net foreign investment outflow and declining domestic institutional participation suggest potential volatility in the Nigerian stock market. Analysts caution that continued foreign capital flight could exert further pressure on the Naira while limiting market liquidity.

For further insights, read this analysis on global investment trends.

Global Investment Trends 2025 – Reuters