Investment shortfall in sectors crucial for achieving sustainable development goals: UN report 

The global investment landscape continues to pose difficulties for industries essential to meeting the Sustainable Development Goals

The report 2025 World Investment Report warned that foreign direct investment (FDI) is drifting away from the countries and sectors most in need.

The analysis showed that despite significant growth in Africa and South-East Asia, FDI flow to developing nations remained flat overall.

In 2024, foreign investment in Africa surged by 75 per cent to $97 billion, accounting for 6 per cent of worldwide FDI. This significant increase was mainly attributed to a major development megaproject in Egypt, worth $35 billion.

The investment gap, the report launched in Geneva on June 19, 2025 stressed, is stalling jobs, infrastructure and sustainable development, especially in the least developed and most vulnerable economies.

In 2024, the value of Goals-related investment in developing countries fell by more than a quarter across infrastructure, renewable energy, water and sanitation and agrifood systems. Only the health sector saw positive growth in 2024, albeit from a small base.

Infrastructure investments dropped 35 per cent, renewable energy fell 31 per cent, spending on water, sanitation and hygiene contracted 30 per cent and agrifood investments declined 19 per cent. Only health and education bucked the trend, posting a 25 per cent increase.

Since the SDGs were adopted in 2015 till 2024, there has been significant investment growth only in renewables and health sectors.

Achieving the SDGs in developing countries requires an estimated $4 trillion to $5 trillion annually, with 40-50 per cent expected to come from private capital and blended finance mechanisms, including international project finance (IPF), the authors of the report observed.

The recent decline in IPF deals has directly contributed to the widening gap in Goals investment. The impact has been particularly severe in least developed countries (LDC) and Small Island Developing States , where IPF can account for more than 60-70 per cent of total infrastructure investment.

Many of these LDCs are in Africa, where one of the most critical investment challenges is the development of local pharmaceutical manufacturing capacity.

Although there is increasing demand, the continent continues to import over 70 per cent of its medicines, with FDI penetration staying quite restricted — comprising under 5 per cent of worldwide green-field projects in pharmaceutical production over the last twenty years.

Infrastructure investment, including for transport and utilities, fell sharply in 2024, dipping below 2015-levels. Investment project financing (IPF) for infrastructure in these two sectors, the report showed, fell significantly as soaring interest rates, inflationary pressures and more restrictive global financial circumstances reduced the availability of long-term capital. The IPF erosion was the worst in SDG-aligned infrastructure sectors, the analysis revealed.

Despite strong investor interest in renewables, more advanced developing countries with mature financial ecosystems have secured most of the deals, and this is becoming a pattern, the data demonstrated.

In LDCs, the sector saw a significant depletion of investments. Multiple planned utility-scale solar and wind projects, like the Scaling Solar initiatives in Madagascar and Zambia, were postponed or downsized to keep up with rising capital costs and currency volatility.

The report called for bold, coordinated action to redirect investment towards sustainable and inclusive development, with a sharp focus on bridging divides in digital economy, infrastructure and sustainable finance.