The United Nations says global investment climate will remain challenging through the rest of 2025 as geopolitical tensions, regional conflicts, economic fragmentation and efforts to de-risk supply chains continue to weigh on flows.
Already, foreign direct investment (FDI) in Africa fell 45 percent in the first half of 2025, extending a two-year slump as trade tensions, high interest rates and geopolitical uncertainty kept investors cautious, UN Trade and Development said in its latest Global Investment Trends Monitor.
Ironically, investment in sectors critical to the Sustainable Development Goals (SDGs) in developing countries were down 10 percent in number and seven percent in value in early 2025, following steep declines last year.
Reads the update in part: “Investment in renewable energy and infrastructure continued to decline, while investment in the health and agriculture sectors increased – though both remain at relatively low levels.
“Internationally financed infrastructure projects, including transport and utilities, continued to decline in early 2025. International project finance activity in these sectors, both in number and value, remained about 25 percent below the average of the past decade, as rising interest rates, inflationary pressures, and tighter global financial conditions continue to constrain long-term capital availability.”
UN data show that in the first four months of 2025, investments in renewable energy, the largest SDG-relevant sector, declined overall, mainly due to a 23 percent drop in greenfield projects.
On the domestic front, Malawi has only managed to achieve 20.9 percent of the SDGs the country, alongside other UN members adopted in 2015.
According to published UN data contained in the April 2025 Update of the UN Common Country Analysis, Malawi’s overall SDG index score is below the global average, with 40.3 percent of the targets registering limited progress while 38.8 percent of the targets are worsening.
Already, over the past decade, Malawi’s FDI inflows have followed a highly volatile trajectory, reflecting both external shocks and domestic structural constraints.
This is happening at a time, when, according to EDF, Malawi’s fundamentals remain less attractive to investors compared to its peers, even within the vulnerable economy group.
Malawi Investment and Trade Centre (Mitc) director general Kruger Phiri earlier said despite progress following some policy reforms, there is still limited infrastructure to facilitate investments.
He said: “Furthermore, the low gross domestic product per capita is a setback as it puts off some investors.”
In its recent Country Private Sector Diagnostic Report, the World Bank said Malawi has one of the lowest investment rates in the region in part due to exogenous factors.
