UAE + Saudi drive MENA’s foreign investment boom

The MENA region was one of the few places global investors actually showed up in 2025 — although the story splits sharply between outward FDI from the Gulf and North Africa coming off a high from the year before. FDI into West Asia — which includes the GCC — rose 20% to almost USD 111 bn, 10 times the 2% growth the developing world managed as a whole, according to the UN Trade and Development’s (UNCTAD) World Investment Report 2026 (pdf).

The UAE and Saudi drove the figure on energy, infrastructure and diversification spending, while Qatar's inflows jumped from USD 460 mn to USD 3 bn on chemicals, energy, and telecoms deals.

North Africa’s headline figure dropped, even though the underlying story doesn’t actually show a broad-based decline. Inflows to the region dropped 56% y-o-y to about USD 22 bn, but that drop is largely due to an unfavorable base effect as 2024 figures were inflated by the UAE’s one-off investment in Egypt’s Ras El Hekma. Even with the Ras El Hekma base effect, Egypt still kept its place as Africa’s largest FDI recipient in 2025, pulling in some USD 15 bn. Strip out that USD 35 bn investment and Egypt’s inflows actually rose by about a quarter, helped by the USD 3.5 bn Alam El Roum investment.

As for the rest of North Africa: Morocco drew about USD 3.3 bn on continued diversification into manufacturing and automotive — including a USD 1.5 bn Stellantis project — while Tunisia landed one of Africa’s largest greenfield announcements in the USD 6 bn H2 Global Energy hydrogen project, and Algeria attracted large hydrocarbons and refining projects.

The GCC is now writing cheques as often as cashing them. The UAE ranks among the world’s top 10 sources of outbound FDI, alongside China, Hong Kong, and Singapore. Saudi’s Dar Al Arkan committed USD 4.2 bn to real estate in Oman, while Qatar's Power International put USD 4 bn into Syria.

Globally, foreign direct investment shook off a two-year slump in 2025, growing 6% to USD 1.6 tn. The headline figure masks a more uneven picture, with the top 20 host economies absorbing more than 80% of global inflows.

The structural signal underneath is worth noting. Capital is concentrating hard in a few advanced hubs and a narrow band of strategic sectors — AI infrastructure, semiconductors, data centers — that nearly tripled their share of global greenfield spending since 2020. Just 10% of that strategic money reached low- and lower-middle-income economies.

And the old pathway is closing too. Non-strategic manufacturing — the labor-heavy industry that once powered earlier stages of development — fell 17% globally in 2015-2019 and 2021-2025. The decline was sharpest where it hurts most, falling 20% in developing economies and 65% in least developed countries.

What’s next: Don’t expect the map to even out. UNCTAD reads slower growth, trade-policy uncertainty, and high financing costs as reasons for firms to delay or cancel projects through the year, while the strong balance sheets of the biggest multinationals keep high-value capital flowing into the same handful of sectors and the same handful of places. The real question for the region’s diversification bets is which side of that line they end up on.