UN Raises Concerns Over Nigeria’s Investment Outlook Amid Global Instability

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.

Foreign direct investment (FDI) was still 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, UNCTAD said in its 2026 World Investment Report, International Investment in a Turbulent Era.

FDI is especially crucial because it offers more than just money, the report noted. It helps countries develop industries, create jobs, transfer technology and link local businesses to global supply chains.

But UNCTAD cautioned that prospects for attracting such investment this year remained grim.

The report notes that the prospects for FDI in 2026 are “highly uncertain”, with slower global economic growth, trade policy uncertainty, geopolitical tensions and armed conflicts continuing to deter investors from committing fresh capital.

The organisation said that many multinationals would probably postpone, suspend or even cancel planned investments until the global business environment settled down.

“Strong balance sheets of leading firms may support investment in high value-added industries but risk further concentration of FDI in a narrow set of sectors and locations,” the report said.

The warning comes as Nigeria seeks to attract more foreign investment to boost industrialisation, create jobs, increase exports and relieve pressure on public finances.

The report underscores 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, according to UNCTAD.

It also found that the distribution of global investment remains uneven.

Although foreign investment into the world’s least developed countries rose 21 per cent in 2025, most of the increase was concentrated in a few resource-rich countries, while many poorer economies continued to struggle to attract investors.

Small island developing States also experienced relatively low levels of investment inflows, with most projects in the areas of tourism, renewable energy and logistics.

Many structurally weak economies still attract limited investment due to small domestic markets, higher business risks and weak engagement in fast-growing sectors of the global economy, UNCTAD says.

For Africa, the report said FDI inflows increased for 2025 by 2 per cent to $70 billion. This was below the $94 billion record set in 2024 when a handful of mega deals inflated investment numbers, but it was still the continent’s third-best performance since 1990.

The number of announced projects rose, but the value of new greenfield investment projects across Africa fell by almost a third, UNCTAD said, indicating investors are opting for more smaller projects rather than a few big ones.

The investments were mostly focused on energy infrastructure, mining, renewable energy and critical minerals, sectors that remain of great interest globally due to the energy transition.

UNCTAD summed up its findings by saying “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”.