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Investment outlook for 2025 weak amid policy uncertainty, but Egypt among key bright spots: UNCTAD
Director of the Investment Research Branch at UN Trade and Development (UNCTAD), Richard Bolwijn
CAIRO - 19 June 2025: Director of the Investment Research Branch at UN Trade and Development (UNCTAD), Richard Bolwijn, warned that global foreign direct investment (FDI) flows are under growing pressure amid rising trade tensions, weak investor confidence, and ongoing policy uncertainty.
He said that preliminary data for early 2025 suggests the investment climate remains fragile, with record-low project announcements in the first four months of the year.
Speaking virtually at the Cairo launch of the World Investment Report 2025, Bolwijn noted that global FDI declined by 11% in 2024, marking the second consecutive year of contraction, with the drop driven largely by Europe, China (which recorded a 29% decline), and South America.
However, he highlighted Africa as a bright spot, with FDI inflows rising by 75%, including a 40% increase in inflows even when excluding Egypt's megaprojects. 'Egypt stood out with several large-scale projects, making it a key driver of the continent's growth,' Bolwijn said.
He explained that project finance, which is a key source of investment for infrastructure and development, has seen a multiyear decline globally, but Egypt was an exception. 'While international project finance has been on a downward trend, Egypt managed to attract significant volumes, particularly in energy and infrastructure,' he added.
Bolwijn also pointed to manufacturing investment as another area of modest global recovery, noting a small uptick in industrial projects in response to supply chain shifts. However, he emphasized that most of this investment still goes to a few countries, primarily those that have proximity to major markets, stable policy environments, and access to trade agreements, areas where North African economies like Egypt have potential advantages.
On the digital economy, Bolwijn said it remained the fastest-growing sector globally, driven by strong flows into data centers and fintech, although investment remains concentrated in a limited number of countries.
Looking ahead to 2025, Bolwijn warned of persistent risks. 'Trade policy uncertainty, tariff escalations, and investor caution are delaying project implementation,' he said. He added that multinational corporations are 'in a wait-and-see mode,' affecting short-term investment prospects.
He concluded by highlighting key areas for policy focus: strengthening regional trade and integration, attracting investment in sectors less exposed to trade disruptions, such as local manufacturing, scaling up infrastructure project finance, and enhancing investment promotion mechanisms, including digital platforms.
'Countries like Egypt that continue to push for reform, improve investment facilitation, and focus on key sectors are better positioned to navigate the current downturn,' Bolwijn said.
