• Africa’s 2024 FDI jumped to USD 97 bn (+75 %), but almost two-thirds came from Egypt’s USD 35 bn Ras El-Hekma smart-city; excluding it, growth was only 12 %.

• The continent secured barely 5 % of the USD 14 bn it needs yearly to close its connectivity gap and attracted just 18 new digital projects—far behind Asia’s 206.

• High capital costs and weak links between national digital strategies and investment-promotion agencies keep Africa at only 3 % of global tech VC and well below its potential for data-centre and ICT manufacturing investment.

Africa’s digital economy embodies the promise of large-scale economic and social transformation. Its rapid expansion is generating growing interest from foreign investors, although inadequate infrastructure, high capital costs and geographic imbalances continue to limit its take-off. In 2024, despite an uncertain global context, foreign direct investment (FDI) flows to Africa rose to USD 97 billion, up from USD 55 billion in 2023—a 75 % increase year-on-year, according to the UNCTAD “2025 World Investment Report: International investment in the digital economy”. Yet behind this headline figure lies a mixed reality for the digital sector, which is expected to play a strategic role in the continent’s sustainable development.

A rebound driven by mega-projects, but a fragile dynamic

The 2024 leap in FDI flows rests mainly on one colossal Egyptian project: the USD 35 billion smart-city of Ras El-Hekma. This single scheme accounts for more than a third of total investment on the continent, masking an otherwise modest trend. Excluding this project, foreign investment in Africa edged up only 12 %, totaling USD 62 billion. Moreover, both the number (-5 %) and value (-3 %) of announced green-field projects declined, suggesting investor caution.

Source: UNCTAD.

In 2024 Sub-Saharan Africa received only about 5 % of the USD 14 billion required annually to close its connectivity gap, notes UNCTAD. South Asia saw new digital project announcements remain broadly flat at USD 1 billion in 2024, against an annual need of USD 20 billion, while the Middle East and North Africa recorded no new investment announcements, despite an annual shortfall of USD 4.1 billion. Europe and Central Asia experienced a sharp drop in announced projects, from USD 2.5 billion in 2023 to just USD 1.1 billion in 2024, representing less than 24 % of needs.

Source: UNCTAD.

Regions with connectivity gaps—such as Africa and parts of Latin America and the Caribbean—also lag in investment for new digital-services projects. Emerging markets in Asia and Latin America, however, saw a notable rise in new fintech-related digital projects, driven by e-commerce growth and expanding financial inclusion. In 2024, developing countries in Asia announced 206 projects, surpassing the 188 projects announced in developed economies. Latin America announced 36, while Africa struggled with only 18 projects, the report reveals.

Source: UNCTAD.

In the data-centre segment—vital for underpinning growth in digital services from cloud computing and artificial intelligence to e-commerce platforms and fintechs—Africa still trails. Yet these centres are a key lever for digital sovereignty and local anchoring of digital services. Between 2020 and 2024, 16 firms announced investments in least-developed countries. International players such as Cloudflare, Digital Realty Trust, Raxio Group or Vodafone Group have recently unveiled USD 2.07 billion worth of data-centre projects in developing African countries. Other companies—Djibouti Data Centre, Econet Global (Mauritius), Paratus Africa (Namibia) or ST Digital (Cameroon)—are actively joining this wave.

Source: UNCTAD.

From 2020 to 2024, developed economies attracted the highest levels of investment in ICT manufacturing (USD 369 billion in total), thanks to their strong high-tech industrial base and supportive policies. Among developing regions, Asia was the main growth pole, drawing USD 191 billion in investment. India and South-East Asia benefited from sizeable investment flows thanks to their integration into global supply chains and solid manufacturing capacity. Africa and Latin America attracted only USD 8 billion and USD 11 billion respectively in ICT equipment manufacturing.

Ambitious policies, but weak institutional anchoring

Faced with these challenges in attracting FDI into the digital sector, African institutions have multiplied initiatives. The African Union’s Digital Transformation Strategy (2020–2030) aims to build an integrated, inclusive and sustainable digital economy. It relies on instruments such as Smart Africa, which promotes public-private partnerships, and the AfCFTA Digital Trade Protocol, seeking to harmonise e-commerce rules continent-wide.

Yet results remain mixed. In 2024, while 86 % of African developing countries had a national digital strategy, only 20 % of these strategies explicitly mention investment-promotion agencies (IPAs). This lack of coordination between digital policies and FDI-attraction mechanisms is a major brake on mobilising foreign capital for digital projects, notes UNCTAD.

High capital costs, absence of guarantees and regulatory uncertainties also curb private-sector involvement. Globally, less than half of telecommunications-infrastructure investments involve foreign sponsors or equity investors. Moreover, only 3 % of global venture-capital tech investment between 2020 and 2024 was directed to Africa. Developing-economy tech firms received USD 206 billion in foreign private investment, averaging USD 40 billion a year. These funds represented more than 60 % of total tech investment in developing economies, with over 50 % coming from the United States, 7 % from the United Kingdom and 6 % from other European markets. Asia received the largest shares: 40 % in South Asia, 24 % in East Asia, 17 % in South-East Asia and 5 % in West Asia. Latin America and the Caribbean accounted for 12 %.

The main players in Africa’s digital investment landscape

China, through China Mobile Communications, stands out as one of the largest investors in African telecommunications, concentrating 17 % of its investments in Nigeria. European firms, meanwhile, remain the main holders of FDI stock on the continent, though they are more active in traditional sectors than in digital.

Development-finance institutions and multilateral development banks play an increasingly central role. They allocate on average USD 600 million a year to digital infrastructure in developing countries, including several in Africa since 2018, covering around 10 % of total project costs. By catalysing private investment through guarantees, subsidies and concessional loans, they unlock strategic projects in high-risk environments.

Africa’s digital future depends on the quality of investment

While Africa’s digital economy is on an upward trajectory, its sustainability will hinge on countries’ ability to attract quality investments—those capable of generating jobs, technology transfer and local anchoring. This requires better coordination between digital policies and investment promotion, a clear and stable regulatory environment, and greater efforts to close connectivity gaps, especially in rural and land-locked areas. At a time when digitalisation has become a prerequisite for sustainable development, Africa can no longer remain a mere consumer-technology market. It must become a true hub for digital production, innovation and services—provided the investments follow.

Originally Written in French by Muriel Edjo

Adapted in English by Idris Linge