The World Bank has issued a stark warning that rising restrictive trade and investment policies are undermining foreign direct investment (FDI), a vital engine for economic growth in Nigeria and other developing countries.
In a report released ahead of the Conference on Financing for Development in Seville, Spain, the bank revealed that FDI inflows to developing economies fell to $435 billion in 2023—the lowest level since 2005. Advanced economies also saw weak performance, with FDI dropping to $336 billion, the lowest since 1996.
Indermit Gill, Chief Economist and Senior Vice President at the World Bank, linked the sharp decline to government policy decisions that discourage investment. “It’s no coincidence that FDI is hitting new lows while public debt reaches record highs,” Gill said. “Private investment must now drive growth, and FDI remains one of the most productive forms of private capital. Yet governments are raising barriers instead of removing them.”
As a percentage of GDP, FDI inflows to developing economies stood at just 2.3% in 2023—nearly half the peak recorded in 2008. Ayhan Kose, Deputy Chief Economist and Director of the Prospects Group at the World Bank, called the trend alarming and urged urgent action. “With global leaders preparing for the Financing for Development conference, this drop in FDI should set off alarm bells,” Kose said. “Reversing this trend isn’t just economically necessary—it’s crucial for job creation, long-term growth, and achieving development goals.”
The report found that in 2025, half of all FDI-related policy changes in developing countries were restrictive—the highest proportion since 2010. It noted that investment treaties can boost FDI flows by over 40%, yet only 380 new treaties have come into force between 2010 and 2024, compared to more than 1,000 in the 1990s. Trade agreements have also declined sharply, falling from an average of 11 per year in the 2010s to just six in the 2020s.
To reverse the downturn, the World Bank urged governments to focus on reforms that attract FDI through improved business environments, reduced informality, stronger institutions, and investments in human capital. Countries making progress in these areas
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