By Adeola Kunle
Nigeria's net foreign liabilities increased to $90.2 billion in 2025, reflecting a rise in foreign investors' claims on the country's assets that outpaced the growth of Nigerian investments overseas, according to new figures released by the Central Bank of Nigeria.
The latest International Investment Position report by the apex bank showed that the country's net financial liability rose by $7.5 billion from $82.7 billion recorded in 2024 to $90.2 billion in 2025.
The report attributed the position to total external assets valued at $125.6 billion, representing investments owned abroad by Nigerian residents, compared with foreign liabilities of $215.8 billion, which reflect investments held by non-residents in Nigerian assets.
Unlike the Balance of Payments, which tracks trade and capital transactions over a given period, the International Investment Position measures the value of a country's external financial assets and liabilities at a specific point in time.
According to the report, the increase in Nigeria's external liabilities was largely fuelled by a $10.1 billion rise in portfolio investment liabilities. The growth was driven mainly by increased foreign investment in government debt instruments, including Open Market Operation bills, as investors responded to attractive yields created by Nigeria's high interest rate environment.
Foreign direct investment liabilities also expanded by $6.7 billion compared with the previous year, reflecting stronger foreign ownership stakes in Nigerian companies and subsidiaries. The development indicates sustained investor interest in selected sectors of the economy.
On the asset side, Nigeria strengthened its external position through a $5.6 billion increase in reserve assets, improving the country's capacity to withstand external economic shocks.
In addition, Nigerian residents expanded their direct investments, portfolio investments and other foreign assets, contributing an extra $3.3 billion to the country's external asset base.
Despite the growth in reserve assets, the report suggests that Nigeria's rising liability position underscores an increasing dependence on foreign capital inflows and highlights the importance of improving the quality and structure of external financing.
Although foreign investment has supported foreign exchange liquidity and helped reduce pressure on the naira, the report noted that a significant concentration of capital in short-term portfolio investments leaves the economy vulnerable to sudden capital reversals if global interest rates rise or investor confidence declines.
The report also indicated that growing foreign holdings of Nigerian debt securities could place additional pressure on the country's foreign exchange reserves whenever investors repatriate interest payments or withdraw their investments.
Economic experts believe Nigeria's long-term external stability will depend on attracting larger volumes of long-term foreign direct investment, increasing non-oil export earnings and sustaining the accumulation of foreign reserves.
They also noted that stronger crude oil prices could improve the country's external position by boosting export earnings and foreign exchange inflows.
However, analysts maintained that reducing external vulnerabilities will require Nigeria to move away from dependence on short-term, yield-driven capital inflows and focus instead on productive investments capable of expanding economic output and generating sustainable foreign exchange earnings.
ADEOLA KUNLE
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