Foreign investment in Africa remains under strain despite a rebound in global capital flows, the United Nations Conference on Trade and Development (UNCTAD) said last week, warning that weak project finance, high borrowing costs and geopolitical uncertainty continue to deter long-term investment on the continent.
In its Global Investment Trends Monitor, published in January, UNCTAD said global foreign direct investment (FDI) rose 14% in 2025 to about $1.6 trillion, driven mainly by activity in developed economies.
However, investment flows to developing countries fell 2%, with Africa among the hardest-hit regions due to a sharp slowdown in new projects.
Africa’s investment outlook is being undermined by a prolonged decline in greenfield investment and international project finance, both critical for infrastructure, energy and industrial development, UNCTAD said.
International project finance fell for the fourth consecutive year in 2025, with values down 16% globally, a trend UNCTAD said was particularly damaging for African economies that rely heavily on long-term external financing.
The agency said Africa’s investment challenges are structural rather than cyclical, and called for stronger investment facilitation measures, more predictable regulatory frameworks and increased mobilisation of development finance to reverse the trend.
