Saudi Arabia has witnessed a dynamic surge in foreign direct investment (FDI) post-pandemic, marking an influx of $65.1 billion from 2020 to 2023. This impressive figure underscores the Kingdom's significant standing among West Asia's top recipients of FDI, as outlined in the latest World Investment Report by the UN Conference on Trade and Development (UNCTAD). The report highlights Saudi Arabia's strategic efforts to stimulate economic growth through comprehensive legal, economic, and social reforms under its National Investment Strategy and Vision 2030.

The efforts of Saudi Arabia to enhance its investment landscape are yielding tangible results. Notably, the nation recorded a 55 percent annual increase in the value of international project finance deals in 2023, reaching $22 billion. This upward trajectory was also reflected in the 389 announced greenfield projects, totaling $29 billion, a 108 percent annual increase in value.

Simultaneously, the United Arab Emirates (UAE) has solidified its position as a magnet for promising investment opportunities. In 2023 alone, the UAE secured AED112.6 billion in FDI, marking a 35 percent increase from the previous year. According to UNCTAD's 2024 World Investment Report, the UAE captured 45.4 percent of the total FDIs flowing into the Arab states. The UAE's robust investment ecosystem is driven by competitive economic policies, advanced legislation, and lucrative incentives, contributing to its ranking as second globally in greenfield FDI project announcements, with 1,323 new projects registered in 2023.

However, the global FDI landscape presents a complex picture. UNCTAD's report reveals a 2 percent decline in global FDI to $1.3 trillion in 2023, largely attributed to geopolitical tensions and economic fragmentation. This downturn in FDI disproportionately affected developing countries, where investments in sectors tied to Sustainable Development Goals (SDGs) saw a notable decline. Despite the challenging environment, some developing regions showed resilience. For instance, developing economies in Asia recorded a significant increase in greenfield FDIs, with a 44 percent rise in the overall value. Yet, overall FDI inflow to the region declined to $621 billion in 2023.

Throughout Africa, the FDI landscape is equally dynamic. Ethiopia emerged as a leader in East Africa, attracting $3.3 billion in FDI in 2023, according to UNCTAD. This strong performance is underpinned by the country's proactive approach to fostering investments through public-private partnerships (PPP) and critical legislative reforms that open up the financial sector to foreign investment. As a result, Ethiopia remains an attractive destination for foreign projects, including the $600 million Aysha wind power project spearheaded by UAE's AMEA Power.

Yet, the broader picture for Africa signals challenges, as FDI inflows to the continent decreased by 3 percent in 2023. The overall decline in FDI flows is attributed to tightened financing conditions, investor uncertainty, and increased regulatory scrutiny. Despite these setbacks, some sub-Saharan countries, like Ethiopia, continue to draw significant investment thanks to strategic initiatives and favorable economic policies.

China's FDI story for 2024 provides another layer of complexity. The country experienced a 28.2 percent year-on-year decline in FDI to $57.94 billion in the first five months of 2024, reflecting broader global investment trends. Despite this drop, China saw a surge in newly established foreign-invested enterprises, signaling an ongoing interest in the Chinese market despite challenging conditions. The manufacturing sector in China continues to attract substantial FDI, with significant contributions from Germany and Singapore, showcasing the nuances of foreign investment flows in a major economy.

In summary, the global FDI landscape in 2023 and 2024 illustrates a mixture of robust growth in certain regions and sectors juxtaposed with broader declines driven by geopolitical tensions and economic uncertainties. Nations like Saudi Arabia and the UAE showcase the successful implementation of reforms and strategic policies that attract foreign investments. At the same time, countries like Ethiopia leverage public-private partnerships to remain competitive in a challenging investment climate. The evolving dynamics of global FDI highlight the importance of adaptive strategies to navigate an increasingly complex economic environment.