Nigerian Businesses Struggling to Attract Credit

Nigeria’s economic reforms have attracted billions of dollars in foreign investment, but much of the capital is bypassing businesses that produce goods and create jobs. In 2023, the country recorded capital inflows of $3.91 billion. That figure rose to $21.4 billion in 2025. Nigeria is set to record much higher inflows in 2026, with $10.37 billion already recorded by the end of the first quarter. However, portfolio investments accounted for more than 95% of these first-quarter inflows. Foreign direct investment was just $135 million, while manufacturing and production received about $152 million. Because of the country’s high interest rates, which peaked at 27.5%, banks favor investing in government securities over riskier business lending. Consequently, credit to real sectors has fallen. This situation, alongside rising operating costs, constrains small businesses and threatens their survival.