The latest ‘World Investment Report’ from UN Trade and Development (Unctad) highlights a significant rebound in foreign direct investment (FDI) inflows to Africa.

In 2024, foreign investment in the continent rose sharply by 75% to reach $97-billion, representing 6% of global FDI, compared with a 4% share the year before, the report shows.

According to the report, which was published on June 19, the surge was largely driven by an international project finance deal for urban development in Egypt. Net of this increase, FDI in Africa still rose 12% to about $62-billion, comprising 4% of global inflows.

Investment facilitation efforts continued to feature prominently in Africa, accounting for 36% of policy measures favourable to investors. Liberalisation also remained a key component of investment policymaking in both Africa and Asia, representing one-fifth of all investment policy measures adopted in 2024.

The report showed that European investors held the largest FDI stock in Africa, followed by the US and China. China’s investment, valued at $42-billion, was increasingly directed toward sectors such as pharmaceuticals and food processing.

One-third of all projects associated with the Belt and Road Initiative, a global development initiative promoted by China, were focused on social infrastructure and renewable energy.

In 2024, foreign investment increased across most regions of Africa, with North Africa recording the strongest performance. In addition to the significant growth in Egypt, FDI in Tunisia rose by 21% to $936-million, while Morocco experienced a 55% increase to reach $1.6-billion.

Across the continent, the value of international project finance (IPF) deals rose by 15%, driven by large-scale energy and transport infrastructure projects. Egypt saw more than a doubling in its IPF commitments. Despite the rise in value, the number of international project finance deals across Africa declined by 3%.

Renewable energy was the only sector to record notable growth in project numbers, with seven major deals valued at about $17-billion. These included offshore power cables and wind and solar power installations, primarily in Egypt, but also in Tunisia, Morocco and Namibia.

In contrast, greenfield investments in Africa declined. Greenfield investment announcements dropped by 5%, and their total value fell by 37%, down to $113-billion from $178-billion in 2023.

Most countries on the continent experienced a decrease in greenfield investment activity, with the exception of North Africa. There, greenfield investments increased by 12% to $76-billion, accounting for two-thirds of the total capital expenditures for such projects in Africa.

In terms of sectors, construction and metal products recorded the largest increases in greenfield investment, while electricity and gas supply projects experienced a significant decline, falling by $51-billion.

Cross-border mergers and acquisitions, which typically account for about 15% of Africa’s FDI inflows, turned negative in 2024.

Global Investment Trends

Global FDI fell by 11% in 2024, marking the second consecutive year of decline and confirming a deepening slowdown in productive capital flows, according to the report.

Although the global total rose by 4% to $1.5-trillion, the increase was attributed primarily to volatile financial conduit flows through several European economies, which often serve as intermediate channels for cross-border investments. These flows do not necessarily translate into new productive assets, thus masking the overall decline in genuine investment activity.

This year’s report was released ahead of the Fourth International Conference on Financing for Development (FFD4), where global leaders were expected to address the growing disconnect between international capital flows and development financing needs.

The findings in the report emphasised the urgency of reforming investment and finance systems to better support inclusive and sustainable economic growth.

The global decline in FDI was driven largely by a 22% decrease in inflows to developed economies, including a 58% reduction in Europe. In contrast, North America recorded a 23% increase, led by the US.

In developing countries, overall FDI inflows appeared broadly stable. However, the report noted this stability concealed deeper structural issues. Many economies continued to see capital stagnate or entirely bypass sectors that are critical for long-term development, such as infrastructure, energy, technology and industries central to job creation.

“Too many economies are being left behind not for lack of potential – but because the system still sends capital where it’s easiest, not where it’s needed. But we can change that. If we align public and private investment with development goals and build trust into the system, domestic and international markets will bring scale, stability and predictability, and today’s volatility can become tomorrow’s opportunity,” Unctad secretary-general Rebeca Grynspan said.

According to the report, the 2024 investment landscape was shaped by a combination of geopolitical tensions, trade fragmentation, and intensifying competition through industrial policies.

Elevated financial risks and ongoing uncertainty contributed to the erosion of long-term investor confidence. As a result, multinational corporations increasingly prioritised short-term risk mitigation over long-term investment strategies, especially in sectors sensitive to national security, supply chain restructuring, and shifting global trade dynamics.

In developing regions, FDI patterns varied significantly. Asia remained the largest recipient of foreign investment, despite a modest 3% decline. Southeast Asian countries, in particular, saw a 10% rise in inflows to $225-billion, which marked the second- highest level on record for the subregion.