Africa risks missing out on the next wave of industrial development as global investment in strategic industries increasingly favours economies with established manufacturing, technological and financial capabilities, according to the United Nations Conference on Trade and Development (UNCTAD).
In its Trade and Development Report 2026: The Geoeconomics of Development, UNCTAD says greenfield investment in developing Asia is spread more evenly across strategic sectors, including semiconductors, artificial intelligence infrastructure, advanced technologies and energy-transition industries.
In Africa and Latin America, investment is more concentrated in energy-transition activities and critical materials, a pattern that risks reinforcing dependence on raw-material exports rather than building diversified industrial economies.
The report highlights a widening challenge for African governments seeking to turn natural-resource wealth into higher-value production, skilled employment and stronger domestic supply chains. As major economies increasingly direct investment towards industries considered strategically important, countries with existing technological and industrial capabilities are better positioned to capture new projects and the economic benefits they generate.
Developed economies captured around 70% of announced greenfield investment in high-value strategic sectors between 2020 and 2025, according to the report. Developing economies led only in critical minerals and strategic materials, where their share of investment was about 59%.
The figures underline a central concern for Africa, attracting capital into mineral extraction and energy-transition projects does not necessarily translate into the development of processing facilities, advanced manufacturing or technology-intensive businesses.
UNCTAD argues that participation in global value chains can provide access to markets and technology, but countries risk remaining confined to lower-value activities when production capabilities and investment strategies are concentrated elsewhere.
The report identifies the structure of investment across developing regions as an important factor in determining their future industrial prospects. Developing Asia has attracted projects across a wider range of strategic sectors, positioning parts of the region to move further into advanced manufacturing and technology infrastructure. Africa’s narrower sectoral concentration could make diversification more difficult unless investment is linked to broader domestic production capabilities.
That challenge comes as governments and businesses increasingly view semiconductors, artificial intelligence, clean-energy technologies and critical minerals as essential to economic competitiveness and national security. These sectors are attracting greater policy support and investment, while export controls, investment screening and supply-chain requirements are making entry more difficult for economies without established industrial ecosystems.
For African economies, the implications extend beyond the amount of foreign investment received. The development gains will depend on whether projects create links with local suppliers, transfer skills and technology, support downstream processing and expand the range of goods and services produced domestically.
The report’s findings point to the importance of industrial policies that coordinate investment, finance, technology and trade objectives. Rather than focusing solely on attracting foreign capital, governments need to consider how projects can contribute to domestic value addition and the development of industries around them.
Africa’s natural resources provide an entry point into strategic global supply chains, particularly as demand grows for materials used in batteries, renewable-energy systems and advanced technologies. But resource endowments alone do not guarantee a larger share of the value generated by those industries.
The challenge is to convert investment in minerals and energy into a wider industrial base, including processing, manufacturing, engineering and services. Without that transition, African economies could continue supplying essential raw materials while higher-value production and technological gains accrue elsewhere.
Regional integration could also help address the constraints facing individual markets. A larger regional market can improve the commercial case for investment, support cross-border supplier networks and make it easier for firms to expand beyond national borders. UNCTAD identifies regional cooperation and coordinated industrial strategies as important tools for developing economies seeking to improve their position in global production networks.
The report does not argue that Africa is excluded from strategic investment altogether. Rather, it warns that the sectoral composition of investment matters: projects concentrated in a limited number of resource-related activities may not generate the broad diversification needed for long-term development.
For policymakers, the central question is therefore not only how much investment the continent attracts, but how effectively that capital strengthens domestic productive capacity. The ability to move from supplying raw materials to processing them and producing higher-value goods will help determine whether the global shift towards strategic industries becomes an opportunity for African industrialisation or reinforces existing patterns of commodity dependence.
