Despite being South Asia's second-largest economy with over half a trillion-dollar GDP, Bangladesh's foreign direct investment (FDI) lags far behind much smaller African nations, such as Uganda and Ghana, according to the United Nations Conference on Trade and Development (Unctad)'s World Investment Report 2026.
The report released yesterday (7 July) shows Bangladesh drew just $1.8 billion in FDI in 2025, compared with $3.4 billion by Uganda and $1.9 billion each by Ghana and the Democratic Republic of the Congo (DR Congo).
While the three African economies benefited from large energy and resource-related investment projects, Bangladesh continued to struggle to attract sizeable foreign investment into its manufacturing and services sectors.
Even so, Bangladesh recorded South Asia's fastest FDI growth in 2025, with inflows rising 45% from $1.23 billion in 2024.
Despite the increase, inward FDI accounted for only 1.4% of Bangladesh's gross fixed capital formation (GFCF), indicating that domestic sources continued to finance the overwhelming majority of fixed capital investment.
The value of newly announced greenfield projects also declined, falling 22.9% to $1.33 billion in 2025 from $1.73 billion a year earlier, reflecting weaker investor appetite for new "from-scratch" investments.
Meanwhile, Bangladeshi companies modestly expanded overseas investment. Outward FDI rose 72.6% to $25 million from $15 million in 2024, while the country's inward FDI stock increased 9.9% to $19.6 billion from $17.8 billion. Unctad's figures closely align with Bangladesh Bank data.
Reforms behind Africa's stronger performance
The report suggests that policy reforms, coupled with large-scale energy and natural resource investments, helped Ghana, Uganda and DR Congo attract more foreign capital.
Since taking office in January 2025, Ghana's President John Mahama has abolished several taxes to stimulate spending and reduce government expenditure while establishing a state-run gold-buying company to strengthen reserves and stabilise the cedi.
According to Bloomberg, inflation eased to 3.4% from more than 21% a year earlier, while gross reserves rose to $13.95 billion by the end of April from about $10.7 billion. Parliament also passed the Ghana Investment Promotion Authority (GIPA) Act 2026, replacing the 2013 investment law.
The legislation removed minimum foreign capital requirements for most investments, streamlined registration, strengthened investor incentives and aftercare, and promoted broader foreign participation, digitalisation and industrialisation under the African Continental Free Trade Area (AfCFTA).
Uganda strengthened the Uganda Investment Authority's one-stop centre, expanded incentives for industrial parks and special economic zones, promoted oil and gas infrastructure, and aligned investment policies with the East African Community and AfCFTA, helping sustain strong FDI inflows into energy, manufacturing and infrastructure.
Since 2020, DR Congo has pursued reforms to improve the business climate through streamlined investment approvals, planned revisions to the 2002 Investment Code, electricity sector liberalisation, special economic zone development, and regional integration under AfCFTA and the East African Community.
Together, these measures have supported billions of dollars in approved investments, mainly in extractives, infrastructure and agriculture.
Global investment
Developing Asia remained the world's leading investment destination among developing regions, attracting $644 billion in FDI in 2025.
However, investment patterns continued to shift as multinational companies reassessed supply chains amid global uncertainty, while governments intensified competition for projects in digital infrastructure, semiconductors, advanced manufacturing and energy-transition technologies.
Globally, FDI rose 6% to $1.6 trillion in 2025, ending two consecutive years of decline. However, Unctad said the recovery remained narrow and uneven, with the 2026 outlook clouded by trade policy uncertainty, geopolitical tensions, regional conflicts, high financing costs and economic fragmentation.
The United States remained the world's largest FDI recipient with inflows of $277 billion, followed by Singapore ($151 billion), Hong Kong ($117 billion), China ($105 billion) and Brazil ($77 billion).
Foreign direct investment (FDI) / foreign direct investment in Bangladesh / United Nations Conference on Trade and Development (UNCTAD)
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