Charlie Robertson is head of macro-strategy at FIM Partners, and author of The Time Travelling Economist.

Sometimes a narrative is so powerful that it plays tricks on your memory. When we think about Donald Trump’s presidential victory, we assume it will mean more foreign direct investment (FDI) into the US to avoid his tariffs, because those were the headlines we read in his first term. 

But Unctad data shows the opposite. FDI inflows to the US under Barack Obama in 2016 were $459bn; this slowed to $203bn in 2018, before collapsing in 2020 due to Covid-19. I can’t be the only one to remember Trump falsely crediting his tariffs for German automotive FDI that had been planned years prior. And despite his tariffs on Mexico, its FDI rose 10% in 2017 and stayed at that level for the next two years. So a second Trump term may not be the threat to emerging market FDI that many might imagine.

However, with a fairly weak global economy which — with Trump in the White House — will become more unpredictable, 2025 won’t be a record-breaking year for FDI flows to the Middle East and Africa. But a few local stories do stand out. 

The most important is Saudi Arabia, where financiers have long-sought to raise money to invest in their pet projects abroad. That story is turning on its head. Today, the country wants your money invested in Saudi itself. And its trillion-dollar sovereign wealth fund, PIF, will co-finance projects to tempt you in. Their aim is to triple FDI inflows from a record-high $33bn in 2022 to $100bn in 2030. Being good pals with both Trump and China helps. 

Egypt is another. Abu Dhabi’s $35bn investment in an Egyptian tourist resort was so big that it pushed FDI flows to all developing economies up by 6% in the first half of 2024. That project alone is tipped to suck in $5bn in investment annually for another 30 years, but Egypt is also seeking more investment into banks (via privatisation), energy and manufacturing. 

South Africa too has turned a corner. Turning the lights back on has helped, after 15 years of load-shedding power cuts. But perhaps as important is its Government of National Unity, which is fast improving investor confidence. Some now share my view that 3% economic growth has become a realistic prospect.   

Lastly, we’ve seen a host of African nations devalue their currencies and negotiate their way through a debt default — that includes Egypt and Nigeria in the first camp, and Ethiopia, Ghana and Zambia in both camps. That’s nearly half a billion people who’ve made themselves far more attractive for investment. 

A surprising number of 2025’s headlines may end up being positive FDI stories for emerging markets.

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This article first appeared in the December 2024/January 2025 print edition of fDi Intelligence