•About 2.8 billion people unable to afford healthy diet worldwide

Ndubuisi Francis in Abuja

Foreign Direct Investment (FDI) inflows to developing economies, a key trigger of economic growth and higher living standards, have dwindled to the lowest level since 2005 amid rising trade and investment barriers, a new report from the World Bank showed.

These barriers pose a significant threat to global efforts to mobilise financing for development.

According to the World Bank report, in 2023, the latest year for which data are available, developing economies received just $435 billion in FDI—the lowest level since 2005.

That coincides with a global trend in which FDI flows into advanced economies have also slowed to a trickle

High-income economies received just $336 billion in 2023, the lowest level since 1996.

Nigeria’s FDI for the second quarter of 2024  dropped to $29.83 million, marking the lowest level recorded based on available data up to 2013.

In its recent report on Nigeria, the Bretton Woods institution said  reforms by the Central Bank of Nigeria (CBN) increased foreign exchange inflows into the country, which was mainly driven by foreign portfolio investment (FPI)—attracted by relatively high yields and potential revaluation gains.

The new report by the World Bank noted that as a share of their GDP, FDI inflows to developing economies in 2023 were just 2.3 per cent, about half the number during the peak year of 2008.

FDI tends to be concentrated in the largest economies.

Between 2012 and 2023, about two-thirds of FDI flows to developing economies went to just 10 countries, with China receiving nearly a third of the total and Brazil and India receiving roughly 10 per cent and 6 per cent respectively.

The 26 poorest countries which are mostly in Africa, received barely 2 per cent of the total.

Advanced economies accounted for nearly 90 per cent of the total FDI in developing economies over the past decade.

About half of that came from just two sources: The European Union and the United States.

In 2023, FDI accounted for roughly half of the external financing flows received by developing economies.

Under the right conditions, it is a strong spur to economic growth, as analysis of data from 74 developing economies between 1995 and 2019 suggested that a 10 per cent increase in FDI inflows generates a 0.3 per cent increase in real GDP after three years.

The impact is nearly three times larger—up to 0.8 per cent—in countries with stronger institutions, better human capital, greater openness to trade, and lower informality.

By the same token, the effect of FDI increases is much smaller in countries that lack such features.

Commenting on the declining FDI flows to developing economies, the World Bank Group’s Chief Economist and Senior Vice President, Indermit Gill said: “What we’re seeing is a result of public policy. It’s not a coincidence that FDI is plumbing new lows at the same time that public debt is reaching record highs.

“Private investment will now have to power economic growth, and FDI happens to be one of the most productive forms of private investment. “Yet, in recent years governments have been busy erecting barriers to investment and trade when they should be deliberately taking them down. They will have to ditch that bad habit.”

Representatives of governments, international institutions, civil society organisations, and the private sector are scheduled to meet in Seville, Spain between  June 30 andJuly 3,

to discuss how to mobilise the financing that will be needed to achieve key global and national development goals. 

The new analysis from the World Bank highlighted the policies that will be needed to achieve those goals at a time when economic growth has slowed to a crawl, public debt has surged to record highs, and foreign-aid budgets have shrunk.

It prescribed the easing of investment restrictions as a key first step, adding that, so far in 2025, half of all FDI-related measures announced by governments in developing economies have been restrictive measures—the highest share since 2010.

“With the global community gearing up for the Conference on Financing for Development, the sharp drop in FDI to developing economies should sound alarm bells.

 “Reversing this slowdown is not just an economic imperative—it’s essential for job creation, sustained growth, and achieving broader development goals. It will require bold domestic reforms to improve the business climate and decisive global cooperation to revive cross-border investment,” said  the World Bank Group’s Deputy Chief Economist and Director of the Prospects Group, M. AyhanKose

The World Bank’s report revealed that investment treaties which tend to boost FDI flows between signatory states by more than 40 per cent have dwindled  Between 2010 and 2024, just 380 new investment treaties came into force, barely a third of the 1990s number. Similarly, the report established that countries that are more open to trade tend to receive more FDI—an extra 0.6 per cent in FDI for each percentage-point increase in the trade-to-GDP ratio. However, the number of new trade agreements signed over the past decade dropped in half—from an average of 11 per year in the 2010s to just six in the 2020s. 

The report identified three policy priorities for developing economies to attract FDI.

First iis for them to redouble efforts to by speeding up improvements in the investment climate, which have stalled in many countries over the past decade.

Second is to amplify the economic benefits of FDI through the promotion of trade integration, improving the quality of institutions, fostering human capital development, and encouraging more people to participate in the formal economy.

 Finally, the report called for the advancement of global collaboration to accelerate policy initiatives that can help direct FDI flows to developing economies with the largest investment gaps.

Meanwhile,  the latest estimates have indicated that nearly 2.8 billion of the world’s population of 8.2 billion people  are unable to afford a healthy diet, which costs roughly $3.96 per person per day in 2022, expressed in current purchasing power parity (PPP) dollars.

This is according to the suite of indicators measuring the Cost and Affordability of a Healthy Diet, known as “CoAHD”, an established set of metrics for tracking food and nutrition security worldwide.

The indicators are jointly produced and published semiannually by the Food and Agriculture Organisation (FAO), a United Nations (UN) agency, and the World Bank and featured in The State of Food Security and Nutrition in the World (SOFI).

At the core of the CoAHD is the Healthy Diet Basket, a global standard derived from representative national food-based dietary guidelines that constitute countries’ own official definitions of a nutritionally-adequate and culturally-relevant diet.

The Healthy Diet Basket reflects the commonalities of national guidelines across countries in terms of the proportions needed of six food groups. While the structure is consistent across countries, the specific foods vary by country based on locally available items. At a given time and place of measurement, the least expensive items in each food group are identified from the retail price data.

Compared to more complex diet models, the Healthy Diet Basket offers a transparent and simple set of criteria for diets that are nutritionally adequate and balanced. And because it is derived from national guidelines, the Healthy Diet Basket allows for both nutritional relevance and alignment with government policies, while remaining comparable across countries for global monitoring.

The global estimates of cost are based on price data from the International Comparison Program, a statistical program overseen by the United Nations Statistical Commission and managed by the World Bank’s Development Data Group, covering nearly 200 countries across the globe.

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