BUJUMBURA — Foreign direct investment (FDI) into developing economies, including Burundi and the broader East African region, fell to its lowest level in nearly two decades in 2023, according to a new World Bank report.
The report shows developing countries received $435 billion in FDI last year, the lowest since 2005, amid rising trade and investment barriers that threaten efforts to boost economic growth and financing for development.
In East Africa, where countries are striving to attract foreign investment to support infrastructure, agriculture, and energy projects, the decline in FDI poses a significant challenge. The World Bank noted that restrictive policies announced by governments in developing economies are at their highest levels since 2010, with half of all new FDI-related measures in 2025 being restrictive.
Indermit Gill, Chief Economist at the World Bank Group, emphasized the need for governments to remove barriers to investment. “Private investment, especially FDI, is critical to powering economic growth,” he said. “Yet many governments have been erecting new barriers at a time when they should be doing the opposite.”
The World Bank’s Deputy Chief Economist, M. Ayhan Kose, highlighted the importance of the issue ahead of the upcoming Conference on Financing for Development in Spain. “For countries in East Africa, including Burundi, reversing the FDI slowdown is essential for job creation, sustained growth, and achieving broader development goals,” Kose said.
FDI remains concentrated in larger developing economies globally, with China, Brazil, and India receiving the majority of flows. East African countries, including Burundi, typically attract a smaller share of total FDI, making the easing of investment restrictions and improvement of the business climate critical.
The World Bank’s analysis underscores that investment treaties and trade openness significantly boost FDI inflows. However, the number of new investment treaties and trade agreements has declined sharply in recent years, which could further dampen investment prospects in the region.
The report recommends three key policy priorities for developing economies like Burundi: easing investment restrictions, improving institutional quality and human capital, and advancing global cooperation to mobilize investment.
As East African governments seek to meet infrastructure and development goals, attracting productive FDI will be crucial. The World Bank is working to support these efforts through financial instruments that reduce investor risk and technical assistance to improve market conditions.
