Africa’s global investment share lingers at 4–6%

Africa's struggle to attract significant Foreign Direct Investment (FDI) continues to be a major concern, with its global share hovering between a mere 4% and 6%. A recent report by the Pan-African Manufacturers Association (PAMA) paints a stark picture: while global FDI surged by 14% to $1.6 trillion in 2025, Africa experienced a dramatic 38% plunge in inflows, settling at just $59 billion. This stagnation keeps the continent in a "peripheral position" within global manufacturing systems.

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Africa’s share of global Foreign Direct Investment remains trapped in a narrow corridor of four per cent to six per cent.

The PAMA Manufacturing Review highlights that the current investment climate is characterized by "extreme volatility and shallow industrialisation." The surge in FDI to $97 billion in 2024 was an anomaly, driven by a few large projects rather than a fundamental strengthening of industrial capacity. Researchers argue that capital continues to be channeled into extractive industries and low-value-added services, hindering the development of high-productivity manufacturing essential for long-term economic transformation.

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the continent is struggling to move beyond a “peripheral position” in global manufacturing systems.

Regional disparities are pronounced. North African nations like Egypt and Morocco have managed to establish automotive and textile hubs by leveraging trade ties with Europe. In stark contrast, Southern Africa, particularly South Africa, has faced severe headwinds, recording negative inflows of $6 billion due to capital withdrawals. PAMA points out that investors often favor low-risk, low-complexity production models, perpetuating a cycle of shallow industrialization that leaves economies vulnerable.

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inflows to Africa plummeted 38 per cent to just $59bn.

To break this cycle, PAMA is calling for a fundamental shift in how African nations approach international capital. The era of "generic openness" must end, replaced by a strategy of "precision." This requires unwavering policy certainty, regulatory discipline, and macroeconomic stability. Furthermore, incentives must become strategic, tied to performance, technology transfer, and local value creation, all supported by world-class industrial infrastructure. Persistent structural deficits in energy and technical skills remain significant drags on growth, with unreliable electricity and logistics bottlenecks frequently disrupting production and deterring investment.

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the current investment climate as one of “extreme volatility and shallow industrialisation”