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0 News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/global-fdi-declines-in-2024-threatening-sustainable-development-goals/
Foreign direct investment (FDI) faced a notable decline in 2024, down by an estimated 8%, presenting a significant challenge to the progress of the Sustainable Development Goals (SDGs), which rely heavily on international project finance.
While global FDI saw an 11% increase, reaching $1.4 trillion, the numbers told a different story when excluding investments through European conduit economies—common transfer points for investments—indicating the broader economic turbulence at play.
In developed economies, FDI growth showed sharp contrasts. North America posted a solid 13% increase, fueled by a massive 80% surge in U.S. mergers and acquisitions (M&A). Greenfield investments, particularly in the semiconductor industry, soared by 93%, reaching $266 billion. The UK and Italy also saw strong gains, with greenfield projects rising by 32% and 71%, respectively. However, Europe faced significant downturns, with a 45% fall in FDI, excluding conduit countries, and a 60% drop in Germany’s inflows. The overall FDI decline in the region reflects broader challenges, including a 26% drop in international project finance deals, which are vital for infrastructure and energy projects.
Developing economies, on the other hand, showed mixed results. FDI dropped 2% across these nations, marking the second consecutive decline and threatening progress on the SDGs. Specifically, FDI in SDG-related sectors fell by 11% globally, with fewer investments in critical areas such as agrifood, infrastructure, and water sanitation. Asia, the leading recipient of FDI in the developing world, experienced a 7% dip, with China seeing a significant 29% drop in inflows, now 40% below its 2022 peak. India stood as a bright spot, with a 13% increase in FDI, driven by growth in greenfield projects. Meanwhile, ASEAN countries saw a slight uptick in investments, rising 2% to a record $235 billion.
In Latin America, FDI fell by 9%, but countries like Brazil, Argentina, and Colombia showed promise, with rising greenfield investments suggesting potential recovery in the future. Mexico, despite regional setbacks, saw an 11% rise in FDI, underscoring its resilience. Africa, however, recorded an impressive 84% surge in FDI to $94 billion, largely due to a major megaproject in Egypt, though excluding this, the continent still saw a 23% increase in FDI.
Looking ahead to 2025, experts predict moderate FDI growth, fueled by improved financing conditions and renewed M&A activity. However, significant risks remain, including geopolitical tensions and global economic instability, which continue to weigh heavily on the investment landscape. The ongoing decline in greenfield investments and international project finance highlights the urgency of developing diversified strategies to attract and sustain investment—particularly in sectors crucial for sustainable development. Both developed and developing economies will need to navigate these complex challenges as they work to meet the ambitious goals set out in the SDGs.
News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/global-fdi-declines-in-2024-threatening-sustainable-development-goals/
