By NoGreeAfrica News Desk
Africa recorded a record high in foreign direct investment in 2024, but major gaps remain in the continent’s digital economy financing, according to the United Nations Conference on Trade and Development (UNCTAD).
UNCTAD said continued global and regional crises, trade tensions, geopolitical fragmentation and shifting industrial policies shaped investment flows in 2024, with investment to developing countries remaining concentrated in a small number of large middle-income economies.
In Africa, the agency said the digital economy has emerged as one of the fastest-growing sectors, with project values expanding by about three quarters and project numbers rising by nearly one third over the past five years.
However, UNCTAD warned that Sub-Saharan Africa attracted only 0.7 billion dollars in greenfield digital projects in 2024, meeting just 5 per cent of the estimated 14.1 billion dollars needed annually to bridge the region’s connectivity gap.
The agency said that while digital infrastructure continues to grow globally, many African countries remain underserved because of high investment risks, high costs of capital, regulatory weaknesses and poor alignment between digital strategies and broader development goals.
UNCTAD noted that regional initiatives such as the Smart Africa Alliance and the AfCFTA Protocol on Digital Trade point to progress, while countries including Nigeria, Kenya, South Africa and Rwanda have taken steps to attract and facilitate digital investment.
But it said the continent still plays only a marginal role in international investment in the digital economy, raising concerns that Africa may remain a consumer market in the global digital system rather than a strong producer of platforms, services and infrastructure. That final implication is an inference based on UNCTAD’s findings.
The report suggests that without stronger policy coordination and lower capital costs, Africa’s digital expansion may continue to rely heavily on external capital, even as demand for connectivity, data infrastructure and digital services grows rapidly across the continent. This is an inference from the report’s documented barriers and financing gap.
