Nigeria’s trade investment sector attracted $65.79 million in foreign capital in the first quarter of 2026, while lawmakers recovered more than N521 million in unremitted Value Added Tax from the Central Bank of Nigeria, highlighting both growing investor interest in commercial activities and intensified government efforts to strengthen public revenue collection.
The developments come as authorities seek to improve fiscal sustainability, diversify economic growth drivers beyond oil, and close revenue leakages amid continuing pressure on government finances.
Data from the National Bureau of Statistics showed that foreign investment into the trade sector rose by 91.31 per cent year-on-year from $34.39 million recorded in the first quarter of 2025 to $65.79 million during the same period in 2026.
Although the latest inflow represented a significant annual increase, it remained below the $80.94 million recorded in the third quarter of 2025 and the $119.21 million attracted in the fourth quarter, suggesting that investor momentum moderated after two exceptionally strong quarters.
The figures emerged as trade became Nigeria’s largest contributor to economic output during the first quarter of 2026, accounting for 17.89 per cent of Gross Domestic Product.
Nigeria’s Macro Backdrop Supports Capital Inflows
The improvement in foreign investment comes as Nigeria’s macroeconomic indicators show signs of stabilisation. The naira traded around ₦1,362 per dollar at the official market in early June, while the country’s external reserves climbed above $50 billion for the first time in nearly three months, according to data from the Central Bank of Nigeria.
Analysts say improved foreign exchange liquidity and a narrowing gap between official and parallel market rates have helped reduce uncertainty for investors evaluating opportunities in Nigeria’s trade, financial services and manufacturing sectors.
Why Nigeria’s Trade Sector Is Attracting More Investment
Economists say improving macroeconomic conditions, better foreign exchange liquidity and easing market volatility have contributed to renewed investor interest in commercial activity.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said the sector’s strong GDP contribution reflected improving business conditions.
“One of the most significant highlights of the report is the emergence of the trade sector as the single largest contributor to GDP at 17.89 per cent.
This reflects the positive effects of improved exchange rate stability, better FX liquidity conditions, easing inflationary pressures and recovering business confidence on commercial activities and trade flows,” Yusuf said.
However, he cautioned that long-term economic transformation cannot depend solely on commerce.
“Sustainable economic transformation cannot be driven by commerce alone. Long-term growth resilience requires stronger productive capacity, deeper industrialisation and significantly higher domestic value addition,” he added.
Analysts note that while trade remains an important growth engine, sustained economic development will require stronger manufacturing output, improved infrastructure and greater value-added exports.
Nigeria Competes With Regional Investment Hubs
Despite the improvement in capital inflows, Nigeria continues to compete with other major African investment destinations such as Kenya, Ghana, Egypt and South Africa for international capital.
Economists note that investors increasingly compare markets based on currency stability, policy consistency, infrastructure quality and ease of doing business rather than market size alone.
While Nigeria remains Africa’s largest economy by GDP, competition for foreign investment across the continent has intensified as governments pursue reforms aimed at attracting global capital.
International Institutions See Gradual Improvement
Recent assessments by the International Monetary Fund and World Bank have highlighted Nigeria’s efforts to restore macroeconomic stability through exchange-rate reforms and tighter fiscal management, although both institutions have warned that inflation and poverty remain significant challenges.
Analysts at Fitch Ratings and Standard Chartered have also pointed to improving investor sentiment following reforms aimed at boosting transparency in foreign exchange markets and public revenue administration.
Regional Trade Investment Integration Gains Momentum
Industry experts believe trade could become an even larger growth driver as African economies deepen integration under the African Continental Free Trade Area.
Bowale Adeoye, Chief Executive Officer of Seedtree Capital, said innovations in trade finance are helping reshape commerce across the continent.
“Trade finance innovation is reshaping intra-African commerce. The shift from dollar-intermediated systems toward continental payment infrastructure is reducing transaction costs and settlement delays while addressing Africa’s $100 billion to $120 billion trade finance gap,” she said.
According to Adeoye, platforms such as the Pan-African Payment and Settlement System are improving settlement efficiency by allowing businesses to conduct transactions in local currencies.
She also highlighted growing investment in logistics infrastructure, particularly cold-chain systems that support food preservation and pharmaceutical supply chains.
“Cold chain logistics is becoming a critical enabler of Africa’s trade resilience,” she said.
Similarly, Chief Executive Officer of NAHCO Commodities Limited, Ijeoma Ezenwa, said African agriculture is increasingly moving beyond raw commodity exports toward value-added processing.
“African agriculture is shifting from exporting raw commodities toward building value through agro-processing and more integrated value chains,” Ezenwa said.
House of Representatives Recovers N521m VAT from CBN
While investment inflows improved, lawmakers intensified efforts to recover public revenues.
The House of Representatives Public Accounts Committee announced the recovery of N521.77 million in unremitted Value Added Tax from the Central Bank of Nigeria.
The funds relate to VAT deductions on fees earned from transactions processed through the Remita payment platform between November 2018 and April 2024.
The recovery emerged from an ongoing parliamentary investigation into alleged revenue leakages, compliance failures and irregularities involving government collections processed through Remita.
According to the committee, the apex bank failed to remit VAT accruing from fees generated through platform transactions, prompting lawmakers to demand payment into government accounts.
The committee subsequently received confirmation that the funds had been remitted.
“In a letter dated May 7, 2026, the Central Bank informed the committee that it had remitted the outstanding VAT liability and provided documentary evidence showing that the sum of N521,765,134.17 had been paid into government coffers,” the committee disclosed.
Committee Chairman Bamidele Salam described the recovery as evidence of the effectiveness of legislative oversight.
“The recovery demonstrates the effectiveness of legislative oversight in safeguarding public resources and ensuring accountability in the management of government revenue,” he said.
Foreign Investors Watching Governance Reforms
Market participants say the recovery of previously unremitted government revenue is likely to be viewed positively by foreign investors seeking greater transparency in Nigeria’s public finance system.
A Lagos-based portfolio manager at an international asset management firm said improved revenue accountability could strengthen investor confidence if similar oversight efforts are extended across other government agencies.
“Investors are increasingly focused on governance quality and fiscal transparency. Recoveries such as this send a signal that institutions are becoming more active in enforcing accountability,” the fund manager said.
Additional Liabilities Under Investigation
The VAT recovery represents only a fraction of the amounts currently under review.
Lawmakers disclosed that another category of unresolved liabilities involves unrefunded charges valued at N954.3 million and accumulated interest of N2.33 billion, bringing the total under that category to approximately N3.28 billion.
The committee is also seeking the recovery of Treasury Single Account collections amounting to N8.99 billion alongside accrued interest estimated at N20.73 billion.
Combined, outstanding liabilities being reconciled exceed N33 billion.
The committee said investigations would continue until all identified obligations are fully accounted for.
Government Focuses on Revenue and Growth
The twin developments highlight Nigeria’s broader economic strategy of simultaneously attracting investment and strengthening revenue mobilisation.
The Ministry of Industry, Trade and Investment has identified trade facilitation, export expansion and investment attraction as major priorities for 2026.
Minister of Industry, Trade and Investment Dr. Jumoke Oduwole has said the ministry intends to leverage digital infrastructure, industrial clusters and export development initiatives to boost competitiveness.
At the same time, fiscal authorities are under pressure to maximise revenue collection amid growing expenditure demands and continued efforts to reduce dependence on borrowing.
What Investors Are Really Watching
Beyond headline investment figures, analysts say the more important test will be whether Nigeria can convert portfolio inflows into long-term productive investment.
While foreign capital entering trade and financial markets has risen sharply, foreign direct investment remains relatively modest compared with the size of Africa’s largest economy.
Several economists argue that sustained improvements in power supply, logistics infrastructure, tax administration and regulatory consistency will ultimately determine whether recent inflows translate into durable economic expansion.
Investor Perspective
The broader capital importation report showed total foreign capital inflows into Nigeria rose to $10.37 billion in the first quarter of 2026, up from $5.64 billion a year earlier.
Portfolio investment accounted for the majority of inflows, while foreign direct investment stood at $135.08 million.
Investors are increasingly watching whether reforms aimed at improving ease of doing business, enhancing revenue transparency and strengthening economic governance can translate into stronger long-term investment commitments.
For Nigeria, attracting sustainable capital while improving revenue collection may prove equally important in determining the pace of economic growth over the coming years.
Key Takeaways
- Trade sector foreign investment rose 91.31% to $65.79 million in Q1 2026.
- Trade accounted for 17.89% of Nigeria’s GDP.
- House committee recovered N521.77 million VAT from CBN.
- Additional liabilities exceeding N33 billion remain under investigation.
- Total capital importation reached $10.37 billion in Q1 2026.
- Policymakers are pursuing both investment growth and stronger revenue collection.
FAQ
How much foreign investment entered Nigeria’s trade sector in Q1 2026?
The trade sector attracted $65.79 million in foreign capital, up 91.31 per cent from Q1 2025.
Why is the trade sector important to Nigeria’s economy?
Trade contributed 17.89 per cent of Nigeria’s GDP in the first quarter of 2026, making it the country’s largest economic sector by output.
How much VAT did lawmakers recover from the CBN?
The House Public Accounts Committee recovered N521.77 million in unremitted VAT linked to Remita transactions.
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What other funds are being investigated?
Lawmakers are reviewing liabilities exceeding N33 billion, including TSA collections, unrefunded charges and accumulated interest.
What is driving investor interest in Nigeria’s trade sector?
Analysts cite improved foreign exchange liquidity, exchange-rate stability, regional trade integration and trade-finance innovation.
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