Investment flows to least developed countries affected disproportionally by global crises

Global Investment Trends Monitor, No. 45 (Special Issue for LDC5)

The monitor shows that investment flows to the LDCs have been disproportionally affected by the ongoing multidimensional crises.


  • Foreign direct investment (FDI) flows to the LDCs as a group increased only slightly over the last decade. After a peak in 2015 when LDCs accounted for more than 5% of developing country FDI they fell back to between $20 and $25 billion annually. This represents about 3% of developing-country inflows, and less than 2% of global flows.

  • Preliminary data for 2022 shows a possible decline in FDI flows to LDCs of about 30%, compared to a marginal increase in developing countries as a group.

  • The impact of the multi-dimensional crises is evident across all types of investment flows. International project finance (IPF) suffered the most, with the number of deals 42% lower than in 2019. The number of greenfield project announcements fell by 55% over the same period. This is a major concern for LDCs, because both investment types are crucial for the build-up of productive capacity and essential infrastructure, and thus for sustainable development prospects.

  • While the list of top FDI recipients changed markedly over the past decade, flows remained concentrated, with the top five recipients accounting for about 55% of the total.

  • Extractive industries remain among the top recipient sectors for international project finance deals and greenfield investment projects, pointing to the continued dependence of LDCs on this sector and on resource-driven FDI. Nevertheless, several LDCs are seeing some sectoral diversification.

  • Investment activity in LDCs in sectors relevant for the attainment of the SDGs - infrastructure, renewables, water and sanitation, food security, health and education - suffered a significant blow in 2021-2022. Comparing with 2015 when the SDGs were adopted, project numbers in the last two years were significantly lower in most sectors except for renewables and water and sanitation.

  • Cross-border investment in climate change mitigation in LDCs showed an upward trend after 2015. However, it remains small compared to developing economies as a group.

Investment flows to least developed countries affected disproportionally by global crises - Global Investment Trends Monitor, No. 45 (Special Issue for LDC5)  (UNCTAD/DIAE/IA/INF/2023/2)
06 Mar 2023