UN Warns Nigeria Faces Tougher Competition for Foreign Investment Amid Global Uncertainty

UN Says Global Investment Shift Poses New Challenge for Nigeria

Nigeria is facing a more challenging environment in attracting foreign direct investment (FDI) as global economic uncertainty, geopolitical tensions and shifting investment priorities reshape international capital flows, according to the latest World Investment Report 2026 released by the United Nations Conference on Trade and Development (UNCTAD). The report warns that developing economies, including Nigeria, must compete harder for investment as multinational companies increasingly channel capital into strategic sectors and advanced economies.

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Despite a modest recovery in global investment flows, the United Nations noted that the benefits remain unevenly distributed, with wealthier economies attracting a larger share of new investments. The report comes as Nigeria continues to pursue reforms aimed at boosting industrialisation, creating jobs, expanding exports and reducing dependence on oil revenues.

Global Investment Landscape Becoming More Competitive

According to UNCTAD, global foreign direct investment rose by approximately six per cent in 2025 to $1.6 trillion, marking a recovery from previous declines. However, much of the increase was concentrated in developed economies and strategic sectors such as artificial intelligence, semiconductors, critical minerals and advanced manufacturing. Developing countries recorded only modest gains as investors became more selective amid geopolitical uncertainty and tighter financial conditions.

The report noted that investment decisions are increasingly influenced by government incentives, industrial policies and national security considerations rather than traditional factors such as production costs and market size. This trend poses additional challenges for emerging economies seeking to attract long-term capital.

Nigeria Must Strengthen Investment Competitiveness

The UN warned that Nigeria will need to improve its investment climate to remain competitive in attracting international capital.

Analysts said expanding infrastructure, improving regulatory efficiency, strengthening policy consistency and enhancing the ease of doing business will be essential to attracting investors. They also emphasised the importance of accelerating industrial development and creating a stable macroeconomic environment capable of supporting long-term investment.

The report added that countries able to offer predictable policies, efficient institutions and investment-ready infrastructure are likely to secure a greater share of global capital flows in the coming years.

Infrastructure and Housing Remain Critical Investment Enablers

For Nigeria's housing and infrastructure sectors, sustained foreign investment remains critical to financing large-scale residential developments, transport networks, energy projects and urban renewal programmes.

Industry stakeholders have consistently argued that improving infrastructure, simplifying land administration and expanding access to long-term finance would increase investor confidence while supporting economic growth and housing delivery. Continued reforms could also encourage greater private sector participation in strategic sectors, including affordable housing and urban infrastructure.

Global Uncertainty Continues to Influence Capital Flows

The UN report highlighted that rising geopolitical tensions, trade policy shifts and economic uncertainty continue to influence cross-border investment decisions.

As governments prioritise investments in strategic industries, competition for capital is expected to intensify, particularly among developing economies. Countries that strengthen institutional capacity and improve their business environment are likely to be better positioned to attract sustainable investment over the medium term.

Outlook

The UN's latest assessment underscores the need for Nigeria to sustain economic reforms and strengthen its investment ecosystem amid an increasingly competitive global environment. While global investment has begun to recover, attracting a larger share of foreign capital will depend on continued improvements in infrastructure, policy stability, regulatory efficiency and investor confidence. For the housing, infrastructure and industrial sectors, stronger foreign investment remains a key driver of long-term economic growth and sustainable development.

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