…Continent records second-steepest decline among developing regions
Africa struggled to attract foreign direct investment (FDI) in 2025, even as global investment flows recovered, according to preliminary estimates by the United Nations Conference on Trade and Development (UNCTAD).
FDI inflows into Africa fell by 38 per cent to $56 billion in 2025, down from $96 billion in 2024. This reversed the gains recorded a year earlier and placed Africa among the weakest-performing developing regions. While the 2025 figure was broadly in line with 2023 levels, it highlighted the continued instability of investment flows into the continent.
UNCTAD said the sharp decline was driven largely by major divestments, particularly in South Africa, alongside weaker investment activity across sectors such as green hydrogen, mining and infrastructure.
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Divestments weigh on Africa’s performance
“FDI inflows dropped sharply by about one third, reflecting a return to prior levels after inflated FDI numbers in 2024 driven by a single large project,” the report said.
Among middle-income African economies, the most significant factor was a major divestment in South Africa. The country recorded negative inflows of $6 billion in 2025 following Anglo American Plc’s $7.2 billion spin-off of its 66.7 per cent stake in Valterra Platinum Limited.
This single transaction had an outsized impact on regional figures, pushing Africa to record the second-steepest decline in FDI among developing regions.
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Pockets of resilience across the continent
Despite the overall decline, some African countries recorded stronger investment inflows. Angola attracted an estimated $3 billion in FDI, marking a return to positive inflows after nine consecutive years of net divestments.
Egypt remained Africa’s largest FDI destination, receiving an estimated $11 billion in inflows. Mozambique recorded an 80 per cent increase in FDI to around $6 billion, supported by the resumption and acceleration of construction on major liquefied natural gas projects.
Nigeria also showed signs of recovery, with UNCTAD noting a modest turnaround in inflows towards the end of the year.
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Global FDI rises, but developing regions lag
Globally, FDI flows rose by 14 per cent in 2025. Investment into developed economies jumped by 43 per cent to $728 billion, driven mainly by Europe and major financial hubs. The European Union recorded a 56 per cent increase, supported by large cross-border acquisitions and a rebound in Germany, France and Italy.
By contrast, FDI flows to developing economies fell by 2 per cent to $877 billion. Nearly three-quarters of least developed countries recorded stagnant or declining inflows.
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UNCTAD also pointed to a growing concentration of investment in capital-intensive projects. Data centres accounted for more than one-fifth of global greenfield project values in 2025, with announced investments exceeding $270 billion.
Looking ahead, the organisation warned that risks to global investment remain high. “Geopolitical tensions, policy uncertainty and economic fragmentation continue to weigh on investor confidence,” it said, adding that without coordinated action, global investment could become increasingly concentrated in a few regions and sectors.
