Foreign investors continued to pull more money out of the Nigerian Exchange (NGX) than they put in during February 2026, even as overall foreign participation picked up and the domestic market posted robust trading volumes.
According to the latest Domestic and Foreign Portfolio Investment Report released by the Nigerian Exchange Limited, foreign outflows climbed 9.12% month-on-month to ₦72.32 billion in February, up from ₦66.28 billion in January. This came despite a sharper 39.39% rise in foreign inflows to ₦66.71 billion from ₦47.86 billion the previous month.
The result was a narrowed but still negative net foreign outflow of ₦5.61 billion for the month, an improvement from the ₦18.42 billion net exit recorded in January. Total foreign transactions (inflows plus outflows) rose 21.81% to ₦139.03 billion.
While the data points to some stabilisation — with both inflows and outflows increasing but the gap between them shrinking — analysts interpret the sustained dominance of outflows as a signal of persistent cautious sentiment among international players. Many appear to be engaging in profit-taking or maintaining defensive positioning even as the broader equities market rallied strongly in February.
Domestic participants once again shouldered the lion’s share of trading activity, accounting for 89.47% of total market turnover compared to just 10.53% from foreigners. In February alone, overall NGX transactions surged 78.93% month-on-month to approximately ₦1.542 trillion (with foreign transactions contributing ₦139.03 billion and domestic the balance of roughly ₦1.4 trillion).
On a year-to-date basis through February 28, 2026, cumulative transactions across the exchange reached ₦2.404 trillion — more than double the ₦1.116 trillion recorded in the same period of 2025, representing a 115.33% year-on-year jump. Foreign inflows for the two-month period stood at ₦114.57 billion against outflows of ₦138.60 billion, yielding a cumulative net outflow of ₦24.03 billion.
This structural reliance on local investors to provide liquidity and drive volume has long characterised the Nigerian equities market. Domestic institutions and retail participants have continued to dominate, particularly following regulatory moves such as the Pension Commission’s (PenCom) upward revision of equity investment thresholds for certain pension funds, which helped fuel buying interest in February.
The foreign flow numbers present a nuanced picture. On one hand, the 39.39% jump in inflows reflects renewed interest from offshore accounts, possibly lured by attractive valuations, dividend yields, or expectations around ongoing macroeconomic reforms.
The NGX All-Share Index (ASI) posted a strong 16.60% gain in February — its best monthly performance in two years — pushing the year-to-date return to around 23.91% amid impressive corporate results and institutional buying.
On the other hand, the higher outflows suggest that many foreign investors remain wary. Persistent macroeconomic concerns — including inflation dynamics, foreign exchange stability, fiscal pressures, and global interest rate environments — appear to be tempering full commitment. Nigeria’s market has historically been sensitive to shifts in global risk appetite, oil prices, and domestic policy credibility.
Market observers note that while net outflows have narrowed, the year-to-date imbalance highlights a broader trend of capital flight relative to fresh investment inflows. This cautious positioning persists even as some analysts point to improving fundamentals, such as projected GDP growth, moderating inflation, and potential monetary easing later in the year.
The dominance of local investors has provided a buffer, enabling the NGX to deliver impressive turnover growth and index gains despite subdued net foreign participation. However, deeper and more consistent foreign inflows are often seen as critical for enhancing liquidity, improving price discovery, and supporting long-term market development.
As Nigeria navigates 2026, the trajectory of foreign portfolio flows will likely hinge on sustained progress in key reform areas: greater exchange rate stability, fiscal discipline, security improvements, and credible policy continuity. Large-scale listings (such as potential Dangote Refinery-related opportunities) and further corporate recapitalisation could also act as catalysts.
For now, the February data paints a market that is buzzing with activity — powered primarily by confident domestic players — yet still struggling to fully convince offshore capital to shift from net seller to sustained net buyer mode.
Whether the narrowing net outflow in February marks the beginning of a more balanced trend or merely a temporary pause in capital exits remains a key question for investors and policymakers alike in the months ahead.
WHAT YOU SHOULD KNOW
foreign investors remained net sellers on the Nigerian Exchange (NGX) in February 2026, recording a net outflow of ₦5.61 billion despite a sharp 39.39% rise in inflows to ₦66.71 billion. Outflows still climbed 9.12% to ₦72.32 billion, showing continued caution among offshore players.
Nigeria’s equities market is increasingly driven by resilient domestic investors, who accounted for nearly 90% of total activity and powered a massive 115% year-on-year surge in overall transactions to ₦2.404 trillion in the first two months of 2026.
