US Capital Flow to Nigeria Risks Decline, PwC Warns

Uncertainties about the United States trade policy direction may cause distortions for capital flows to Nigeria, Big Four accounting firm PwC has warned.

As of the third quarter of 2024, capital flows from the US to Nigeria reached $334.7 million, marking a 24% decrease from the $442.7 million recorded in 2023, according to the firm.

“Although the share of US flows as a percentage of total capital flows to Nigeria was 5%, uncertainties about US policy direction may cause capital flows to Nigeria to decline,” it said in a new report.

PwC said the volatility in the Nigerian stock exchange may persist in the short term as foreign investors stay cautious.

It pointed out that after the US tariff announcement on April 2, investors lost N659 billion on April 7 as the benchmark index of the Nigerian Exchange Limited dropped by 1.23%, marking the first decline in months.

“Key stocks like Oando and Honeywell Flour Mills fell by 10% and 9.98%, respectively. Despite earlier gains in 2025, the market’s year-to-date return decreased to +1.25%, reflecting growing investor unease about Nigeria’s vulnerability to global shocks,” the firm said.

It said US reciprocal tariffs and protectionist trade measures may increase global economic policy uncertainty, potentially reducing global foreign direct investment (FDI) flows.

PwC noted that historical events such as the 2020 coronavirus pandemic and the 2022 Russia-Ukraine war illustrate how global policy uncertainty constrains FDI flows.

“In Nigeria, this may slow FDI inflows, particularly from multinationals reevaluating their exposure to emerging markets. Sectors dependent on foreign capital, such as manufacturing and technology, may experience slower growth,” it said.