Africa Secures More Greenfield Projects, Yet Value Drops 31%

Africa recorded a sharp 31.2 per cent decline in the value of announced greenfield foreign investment in 2025, even as the number of new projects rose—highlighting a growing disconnect between the quantity and scale of investments reaching the continent.

According to the Bashir Adeniyi Centre for International Trade and Investment (BACITI), citing the UN Trade and Development (UNCTAD) World Investment Report 2026, the value of announced greenfield projects fell from $115.1 billion in 2024 to $79.1 billion in 2025. This suggests that Africa is attracting more small investment commitments, while seeing fewer projects with the potential for transformational economic impact.

The decline came despite a broader recovery in global foreign direct investment (FDI), which increased 6 per cent from $1.532 trillion in 2024 to $1.624 trillion in 2025. Africa’s total FDI fell by 26.3 per cent, from $94 billion to about $70 billion, leaving the continent with only around 4.3 per cent of global investment flows.

BACITI noted that the decrease should be seen in part in light of the exceptional 2024 inflow from Egypt’s Ras El-Hekma development transaction, which had significantly boosted Africa’s figures that year. Nonetheless, Africa’s 2025 inflow remained its third-highest annual total since 1990 and about one-third above its 2010–2024 average.

Shift in Investment Scale and Focus

A deeper concern, BACITI said, is the changing scale and composition of investment in Africa. While more greenfield projects were announced, their combined value dropped, indicating that investors are committing to a larger number of smaller projects rather than fewer, large-scale, transformational investments.

Globally, investors are increasingly directing greenfield capital toward strategic sectors such as artificial intelligence infrastructure, semiconductors, critical minerals, and clean-energy technologies. The share of global greenfield investment targeting these sectors rose from 16 per cent in 2020 to 44 per cent in 2025.

Risks and Opportunities for Africa

This shift presents both opportunities and risks for Africa. The continent’s wealth of critical minerals, natural gas, renewable energy potential, strategic maritime routes, and a growing consumer market could position it to capture a greater share of emerging global investment. However, BACITI warned that if minerals and energy resources are exported without corresponding development of local processing, manufacturing, engineering, research, and supplier industries, Africa risks reinforcing its dependence on extractive activities.

In Nigeria’s case, the 2025 FDI rebound was heavily concentrated in oil, gas, refining, mining, and related energy infrastructure. BACITI urged Nigeria to use energy investments as anchors for downstream industries, rather than allowing foreign capital to operate as isolated projects. Sectors such as gas-to-power, fertiliser, petrochemicals, industrial manufacturing, engineering, and fabrication could all help to multiply the domestic economic impact of energy-sector investments.

Regional Value Chains and Policy Recommendations

BACITI also encouraged African countries to leverage the African Continental Free Trade Area (AfCFTA) to create regional value chains, allowing specialisation in different stages of production rather than competing individually for isolated projects. For example, minerals could be extracted in one country, refined in another, converted into components elsewhere, and assembled near major markets or ports—providing the scale that individual African markets often lack.

The Centre recommended that African governments avoid costly subsidy competitions for individual investment projects. Instead, they should focus on infrastructure, trade facilitation, transparent licensing, domestic processing, and supplier development.

For Nigeria, this means improving electricity supply, ports, customs, logistics, and deploying a National Single Window to make the country a more competitive manufacturing and regional distribution base. BACITI stressed that manufacturers invest where inputs can enter, goods can move, and exports can reach markets efficiently and predictably.

Beyond Capital Inflows: Building Value Chains

BACITI concluded that Nigeria should judge the success of foreign investment not only by the volume of capital inflows, but also by how many Nigerian companies become part of resulting value chains. The global competition for investment is becoming increasingly strategic, with capital concentrating in economies and sectors linked to technology, energy security, critical minerals, and resilient supply chains.

For Africa, BACITI argued, the challenge is no longer simply attracting investment, but ensuring that incoming capital builds productive capacity, strengthens domestic firms, creates skilled employment, facilitates technology transfer, and expands export opportunities.