The United Nations Conference on Trade and Development (UNCTAD) has warned that rising global uncertainty, trade disputes and geopolitical tensions could make it harder for Nigeria and other developing countries to attract the foreign investments they rely on to grow their economies.
In its 2026 World Investment Report, International Investment in a Turbulent Era, UNCTAD said foreign direct investment (FDI) remained the largest source of external financing for developing economies in 2025, at around 50% of total external funding – more than remittances, official development assistance and portfolio investments.
FDI is particularly important because it brings more than just money, the report pointed out. It helps countries develop industries, create jobs, transfer technology and link local businesses to global supply chains.
But UNCTAD warned that the prospects for attracting such investment this year were still grim.
The report said the outlook for FDI in 2026 was “highly uncertain”, with slower global economic growth, uncertainty over trade policy, geopolitical tensions and armed conflicts continuing to deter investors from committing fresh capital.
The organisation said many multinational companies are likely to delay, suspend or even cancel planned investments until the global business environment settles down.
“Strong balance sheets of leading firms may support investment in high-value industries but risk further concentrating FDI in a narrow set of sectors and locations,” the report stated.
The warning comes as Nigeria seeks to attract more foreign investment to drive industrialisation, create jobs, boost exports and ease pressure on public finances.
According to UNCTAD, the report highlights the need for Nigeria and other developing countries to improve their investment climate by improving infrastructure, ensuring policy consistency and creating conditions that will attract long-term productive investments.
The report also found that the distribution of global investment is still uneven.
Despite a 21 per cent increase in foreign investment into the world’s least developed countries in 2025, most of the increase was concentrated in a few resource-rich countries, with many poorer economies still struggling to attract investors.
Small island developing States also received relatively low levels of investment inflows, with most projects in the areas of tourism, renewable energy and logistics.
Many structurally weak economies still receive limited investment because of small domestic markets, higher business risks and weak participation in fast-growing sectors of the global economy, UNCTAD says.
The report indicated that for Africa, FDI inflows rose by 2 per cent to $70 billion in 2025. While that fell short of the $94 billion extraordinary amount in 2024, when a handful of mega deals inflated investment numbers, it was still the continent’s third-best performance since 1990.
UNCTAD said the value of new greenfield investment projects across Africa fell by almost a third, but the number of announced projects increased — indicating investors are choosing more smaller projects rather than a few big ones.
The investments were mainly in energy infrastructure, mining, renewable energy and critical minerals – sectors that continue to attract significant global interest due to the energy transition.
UNCTAD concluded that “the findings reinforce the urgency for developing economies to strengthen domestic investment frameworks, diversify their productive base and improve competitiveness in order to attract more resilient and sustainable foreign investment in an increasingly volatile global economy”.