Foreign direct investment (FDI) flows to Africa fell by about one-third in 2025, even as global FDI rose 14 percent to an estimated USD 1.6 trillion, according to a new UNCTAD Global Investment Trends Monitor released in January 2026. The report warns that lower‑income economies, including most of Africa, are being left behind as capital concentrates in data centres, semiconductors and rich‑country financial hubs.

UNCTAD estimates that FDI to Africa dropped from USD 96 billion in 2024 to about USD 59 billion in 2025, reversing the previous year’s spike that had been boosted by a single large transaction. While global flows to developed economies surged 43 percent and high‑income economies saw a 22 percent rise, developing economies overall recorded a 2 percent decline, with Africa among the hardest hit.

Egypt remained the continent’s top FDI destination with inflows of around USD 11 billion, while Angola moved back into positive territory at roughly USD 3 billion after nine years of net divestment. Mozambique’s inflows jumped 80 percent to USD 6 billion as work resumed on major LNG projects, but these gains were not enough to offset sharp declines elsewhere on the continent.

Across Africa, announced greenfield projects – which indicate future investment – held up better than flows but were still fragile. The number of greenfield announcements ticked up 6 percent to 845 projects in 2025, yet international project finance deals, crucial for infrastructure, fell 7 percent in number.

UNCTAD notes that FDI to lower‑income countries worldwide fell 5 percent to USD 159 billion in 2025, underlining “persistent challenges” in accessing external finance, managing high risk perceptions and overcoming structural vulnerabilities. Africa, where most states fall into this category, is particularly exposed as FDI remains a critical source of long‑term capital for infrastructure and industrialisation.

Although Africa’s greenfield project count rose modestly, the value of such projects across lower‑income economies fell 30 percent to USD 189 billion, with most sectors registering lower investment except data centres, which saw a 44 percent increase. International project finance in lower‑income countries proved relatively resilient, with total value up 7 percent to USD 218 billion, but project numbers still declined.

Globally, UNCTAD identifies data centres and semiconductors as the standout winners of 2025, together reshaping the FDI landscape. Data centre greenfield projects alone attracted more than USD 270 billion – over one‑fifth of all announced investment – led by France, the United States and the Republic of Korea, with emerging markets such as Brazil, Thailand, India and Malaysia also among the top hosts.

By contrast, sectors that are central to Africa’s development agenda weakened. Greenfield investment in renewable energy fell 28 percent worldwide to USD 197 billion, while the value and number of international project finance deals in renewables dropped to their lowest levels in four years. Investment in extractives and critical minerals, where African countries had hoped to leverage resource endowments, also declined sharply, with project values down 36 percent and critical minerals projects down 63 percent compared to 2024.

Infrastructure‑related greenfield and project finance deals – spanning power, transport, telecoms and real estate – shrank 10 percent in number globally in 2025, although total value remained broadly flat due to a few mega‑deals. For Africa, where regional integration and industrial corridors depend on roads, ports, power and digital backbones, the continued slide in international project finance represents a structural risk.

UNCTAD highlights that international project finance is now at a five‑year low, while domestic sponsors have begun to fill some of the gap, especially in renewable energy, with a 58 percent increase in the number of domestically led deals and a 21 percent rise in value worldwide. However, most African countries lack the fiscal space and capital markets depth to replace foreign sponsors at scale.

Looking ahead to 2026, UNCTAD sees highly uncertain prospects. A further rise in global FDI is possible as borrowing costs ease and mergers and acquisitions accelerate, but the agency warns that geopolitical tensions, regional conflicts and policy fragmentation will likely keep real project activity subdued.

Any growth in flows, it argues, will probably be driven by a handful of mega‑transactions and conduit flows through financial centres, with capital increasingly concentrated in strategic sectors like data centres and AI‑related semiconductors rather than broad‑based industrial or infrastructure projects in poorer regions.

For Africa, the numbers underscore a widening investment divide: as capital races into digital infrastructure and advanced manufacturing in rich and emerging hubs, the continent risks being further sidelined unless it can attract and structure deals that link its energy transition, resource base and large young market to these new global investment priorities.

A hard-hitting Oxfam report has spotlighted Africa’s alarming slide into deeper poverty since 2020, even as billionaire fortunes explode globally, creating fertile ground for elite control and democratic backsliding across the continent.

The report titled ‘Resisting the Rule of the Rich’ reveals that poverty reduction has stalled worldwide, with numbers rising sharply in Africa. Nearly half the global population (48%, or 3.83 billion people) lived in poverty in 2022, while one in four faces moderate or severe food insecurity — up 42.6% since 2015.

Billionaire wealth has hit record highs, surpassing 3,000 individuals for the first time. In 2025 alone, fortunes grew three times faster than pre-Trump averages, with Elon Musk becoming the first half-trillionaire. This surge coincides with hunger affecting one in four people globally, including 92 million in Europe and North America.

Africa exemplifies the disconnect: extreme wealth concentrates while poverty climbs, enabling “oligarchic” influence over politics. Billionaires are 4,000 times more likely to hold office than ordinary citizens, buying elections, media and policy via donations and lobbying.

Faced with protests against unaffordable living costs and austerity, governments opt for crackdowns rather than taxing the rich. The report details brutal responses in Kenya (39 killed, 71 abducted in 2024 Finance Bill protests) and Argentina (1,155 injured under Milei’s billionaire-backed reforms).

In Africa, this plays out amid debt crises and inequality, with elites scapegoating migrants to distract from systemic failures. Unequal countries are up to seven times more likely to see democratic erosion — undermining judiciaries, restricting liberties and normalising authoritarianism.

Oxfam demands National Inequality Reduction Plans targeting Gini coefficients below 0.3 and an International Panel on Inequality like the IPCC. Governments must tax super-wealth, ban rich campaign finance, regulate lobbying and protect civic space.

Trade unions, civil society and grassroots movements are hailed as counterweights, with successes like Uruguay’s José Mujica showing the power of mobilising the poor.

The report concludes: Africa and the world face a stark choice — oligarchy or democracy. With billionaire power at its peak, the continent must prioritise redistribution to safeguard freedoms and halt poverty’s rise.

A major new Africa-wide study has warned that Ethiopia must move far more aggressively on technology, research investment and digital tools if it is to unlock the full potential of its agricultural sector and tackle persistent rural poverty.

The 2025 Annual Trends and Outlook Report (ATOR 2025), released by AKADEMIYA2063 under the AU’s Comprehensive Africa Agriculture Development Programme (CAADP), finds that most of Sub-Saharan Africa’s growth, including in Ethiopia, still comes from expanding cultivated area rather than from innovation and efficiency gains. While countries like those in Asia used improved seeds, irrigation, mechanisation and research to raise yields and cut poverty, African productivity remains “stagnant” once land expansion is stripped out.

The report shows that African governments, Ethiopia among them, still spend well below the CAADP target of 10 percent of national budgets on agriculture, and even less on long-term research and development. Public agricultural research spending across Sub-Saharan Africa averages just over US$2 billion a year, far behind regions that successfully used science to drive a Green Revolution.

Authors argue that this underinvestment directly limits total factor productivity (TFP) – the efficiency with which land, labour and capital are used – and slows structural transformation. Micro-level studies cited in the report indicate that, for many smallholders, productivity growth has been flat or even negative, contributing to only modest reductions in extreme poverty and hunger since 1990.

ATOR 2025 stresses that Africa’s problem is no longer a lack of technology but the failure to adopt and scale it. It highlights digital agriculture, artificial intelligence, geospatial tools, improved seeds, biotechnology, mechanisation, modern irrigation, insect farming and aquaponics as proven or emerging solutions that could raise yields, cut losses and build resilience if properly deployed.

A new “Untapped Potential Index” shows that many countries, including Ethiopia, have high needs and growing readiness for AI and geospatial tools in agriculture but very low actual use, pointing to a large gap between opportunity and reality. Digital advisory platforms, for example, have been shown to boost yields and incomes when tailored to local conditions and embedded in trusted relationships, but weak infrastructure, low digital literacy and limited finance are holding back scale.

The report repeatedly notes that technology alone will not transform Ethiopia’s agrifood system without stronger institutions, coherent policies and lower transaction costs. It calls these “the real technology frontier” – arguing that improved seeds, fertilisers and digital tools only deliver impact when backed by predictable regulation, effective extension systems, producer organisations and functioning markets.

Seed policy and regulatory frameworks are singled out as a core challenge in many African countries, where slow variety release, weak quality control and fragmented markets limit farmers’ access to climate-resilient, locally adapted seed. ATOR 2025 urges more harmonised, science-based rules at regional level, and better integration of informal and farmer-managed seed systems, which remain vital for smallholders.

Producer organisations and cooperatives are highlighted as critical intermediaries for complex technologies, from AI-driven advisory to digital finance. By aggregating demand, brokering partnerships with service providers and building trust, they can help smallholders adopt innovations more quickly and fairly.

The study also underlines the importance of data and monitoring for policy decisions, noting that CAADP’s Biennial Review has improved accountability but still suffers from gaps and delays in national statistics. It calls for stronger use of digital tools, geospatial data and real-time information systems to track yields, climate risks, market flows and investment impacts.

For Ethiopia, which is already rolling out digital farmer registries and advisory hotlines, the report suggests that scaling such systems – and ensuring they feed into planning and budgeting – will be central to building a more evidence-based agricultural strategy.

Comparative chapters on China and Latin America show how long-term investment in research, extension, rural infrastructure and innovation systems allowed those regions to shift from land expansion to productivity-led growth. They also demonstrate how targeted use of digital tools, intelligent input management and value-chain integration improved efficiency and competitiveness.

The report argues that Ethiopia and its neighbours can draw on these experiences while tailoring solutions to local conditions, especially by prioritising agricultural R&D and technology adaptation, building digital and climate-intelligence infrastructure, empowering producer organisations and SMEs as innovation partners, and aligning public spending with high-return interventions rather than short-term input subsidies. ​

Overall, ATOR 2025 frames the next decade as a decisive window for Africa’s agrifood transformation under the newly adopted Kampala Declaration and CAADP Strategy and Action Plan 2026–2035. It urges governments, including Ethiopia’s, to treat science, technology and innovation as “strategic assets” and to move from ad hoc reforms towards integrated, innovation-driven strategies.

With the right mix of investment, governance reform and inclusive digitalisation, the report concludes, countries like Ethiopia can shift from simply expanding farmland to leading on climate-smart, technology-enabled agriculture – turning a lagging sector into a driver of jobs, resilience and shared prosperity.

The National Bank of Ethiopia (NBE) has taken steps to improve transparency in its special foreign exchange auctions by adopting a more informative approach, supported by newly issued guidelines that align with international best practices. These efforts, which include restricting foreign exchange interventions to auctions, have been positively received by the International Monetary Fund (IMF).

In its most recent auction on Tuesday, March 20, the central bank provided more detailed results, marking a departure from its previous practices. This change follows the introduction of foreign exchange auctions as part of the broader economic reforms and forex market liberalization initiated in mid-2024.

Commercial banks had previously expressed frustration over the lack of transparency in the auction process, reporting that procedures and outcomes were not clearly communicated, leaving them uncertain about how bids were evaluated.

An anonymous banker told Capital several months ago, “We were only informed verbally that our bid was unsuccessful and were instructed to collect the funds we offered.”

An international banking expert at one of Ethiopia’s 32 commercial banks noted that while banks submit bid rates via email as directed by the NBE, the bidding mechanism itself remained unclear. “We have no information about how the bidding works,” he stated last April. “We do not even know who opens our emails or whether our bid details are shared.”

Another banker mentioned that their bank was disqualified for bidding below the average rate, while a different institution reported its bid was rejected for being slightly above the average in the third auction held on April 1, 2025.

Criticism also extended to the NBE’s announcement of results, which bankers claimed lacked sufficient detail, previously revealing only the average rate and the number of successful banks without listing participants or full outcomes.

In response to feedback from market participants and international partners, the NBE issued special foreign exchange auction guidelines on December 30.

These guidelines clarify that allotment is based solely on bid prices, with multiple rates applied for successful bids.

Rates are arranged from highest to lowest in sales auctions and from lowest to highest in purchase auctions until the offered amount is exhausted. In cases of tied bids, foreign exchange is distributed equally among those bidders.

The guidelines also specify that auction results must include the marginal rate, weighted average rate, highest and lowest bid rates, and the number of participants.

The most recent auction exemplifies these improvements. The NBE reported that 21 banks participated, with 15 successfully securing foreign exchange. The lowest bid rate was 150 birr per USD, the highest was 155 birr, and the weighted average rate of successful bids was approximately 154.92 birr per USD. The marginal rate stood at 154.78 birr. The central bank allotted USD 70 million against a total bid amount of USD 94.7 million.

Over the past two months, following the release of a four-month auction schedule, the NBE has sold USD 390 million, including USD 150 million outside the originally published schedule.

The IMF recently acknowledged these developments, stating: “Ongoing efforts by the National Bank of Ethiopia to strengthen FX market functioning are welcome, including publishing FX auction guidelines consistent with international best practice and limiting FX intervention to auctions.”