Foreign Investor Trends in Key African Markets in 2025

• In 2025, foreign investor trends yielded different results in key markets across Africa. While Kenya’s inflows are getting smaller, while Nigeria’s are driven by oil, Egypt’s by mega-projects, and South Africa’s by a mix of factors.
• Nigeria’s foreign direct investment (FDI) grew 3.2% with most of the money came from the energy sector (75%). Egypt’s $35 billion deal for Ras El-Hekma increased foreign direct investment by 50%, with a focus on infrastructure.

As Africa’s investment scene evolves, foreign investors are dealing with a complicated mix of chances and risks. This raises an important question: are they making a selective return or planning a permanent retreat?

This year, the Nairobi Securities Exchange (NSE) showed that foreign participation had dropped sharply, going from 46.68 per cent in Q2 to 30.12 per cent in Q3, the lowest level in 15 years. However, there are still areas of selective interest, thanks to strong sectors and policies that are stabilizing. This trend is seen in important markets like Nigeria, Egypt, and South Africa. It is a sign of bigger changes caused by currency fluctuations, perceptions of capital controls, and geopolitical tensions.

In 2021, Africa’s foreign direct investment (FDI) inflows reached an all-time high of $83 billion. However, by 2024, they had dropped to $60 billion due to global declines. The story for 2025 is one of cautious re-engagement in high-potential areas. According to the African Development Bank’s Economic Outlook, Africa’s economy is expected to grow by 3.7 per cent in 2025. Investors need to understand this behavior in order to take advantage of this growth.

Foreign Investors in Kenya: Participation Is Going Down, But Only in Certain Areas

Kenya’s NSE is a good example of how foreign investors are “thinning” out. In September 2025, participation was only 28.01 per cent, down from 31.28 per cent in August. According to the Kenyan Wall Street report, foreigners were net sellers in seven of the nine months, selling KSh7.4 billion in September alone.

This mass exodus, which was the biggest in 2025, is different from the NSE’s 15 per cent share gains in Q3, which added KSh367 billion in wealth. But selective re-entry happens: foreign inflows came back in October, focusing on blue-chip stocks as the shilling stabilized at KSh 128.5–129.5/USD. The S&P’s upgrade to a “B” stable outlook in August raised people’s spirits, showing that they trust Kenya to handle its debt even though the GDP ratio is 68 per cent.

According to NSE’s unaudited Q2 results, which showed turnover of KSh2 trillion, this mixed behavior shows that locals dominate the market (70 per cent of turnover), while foreigners wait for value.

Banking, telecoms, and energy are the top three counters attracting foreign invests in Africa

Even though foreign investment is going down overall, investors in Africa 2025 are focusing on stable sectors such as banking, telecoms, and energy, which promise stability in times of change. Banking brings in money for digital innovation.

In Kenya, KCB Group and Equity Group counters at the NSE saw gains of 32 per cent and 34 per cent, respectively, attracting foreigners looking for high yields (6–10 per cent). According to IMARC’s South Africa fintech report (15.85 per cent CAGR to 2033), telecoms, with Safaricom’s green bond oversubscribed by 175 per cent, show how AI and digital adoption are growing.

Energy, especially renewables, is booming: FDI in Africa’s energy sector rose by 75 per cent in 2024, with Egypt’s Ras El-Hekma project bringing in $35 billion from the UAE. These industries make up 30 per cent of FDI (UNCTAD, 2025) and protect against currency exchange rate risks. For example, telecom companies like MTN in South Africa give 20 per cent returns.

The fact that some foreigners are coming back here shows that they are willing to take risks on high-growth, defensive assets in a continent that is expected to get $83 billion in foreign direct investment (FDI) in 2025.

How FX Volatility Affects Foreign Investors in Kenya 2025

FX volatility has had a big effect on how foreign investors act in Kenya 2025. The shilling’s changes have made people less likely to invest and made them think there is more risk. Volatility reached 20 per cent in the first quarter because of U.S. rate hikes, which caused KSh 3.35 billion to leave the country in the first week of September (Trading Room, 2025).

A study by the IMF in 2025 found that exchange rate volatility makes it harder for people in SSA to get private credit by 15 per cent. Kenya’s NPL ratio of 14.9 per cent shows how hard this is. People were more cautious because they thought there were capital controls, even though there weren’t any. Moody’s Caa1 rating in 2025 mentioned FX risks.

But when the value of the KSh stabilized at KSh 128.5/USD by August, some people started to buy again because S&P’s “B” upgrade said that controls had gotten better. This volatility has hurt confidence, and foreign direct investment (FDI) is down 28 per cent. However, sectors that are still doing well show that foreigners are willing to bet on recovery.

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Comparing Foreign Investor trends in Kenya, Nigeria, Egypt, and South Africa

In 2025, foreign investors act very differently in Africa. For example, Kenya’s inflows are getting smaller, while Nigeria’s are driven by oil, Egypt’s by mega-projects, and South Africa’s by a mix of factors.

According to UNCTAD 2025, Nigeria’s foreign direct investment (FDI) grew 3.2 per cent even though the population was growing. Most of the money came from the energy sector (75 per cent). Egypt’s $35 billion deal for Ras El-Hekma increased foreign direct investment by 50 per cent, with a focus on infrastructure (World Bank, 2025).

Telecoms and renewable energy in South Africa grew by 75 per cent, while the AI market was worth $360 million according to advisory firm McKinsey. Kenya’s 30 per cent foreign investment is less than South Africa’s 40 per cent, but selective banking and telecom inflows are similar to Egypt’s project focus. FX volatility affects everyone.

For example, Nigeria’s naira lost 35 per cent of its value according to Reuters. However, Kenya’s perceptions of controls make things worse, while South Africa’s rand stays stable. In general, Africa’s $83 billion in foreign direct investment (FDI) in 2021 went down. However, the selective re-entry in energy and telecommunications in 2025 shows that there are structural changes happening, not full exits.

Are foreign investors done with Kenya, or are they just waiting for the right price? With the FX market stabilizing and sectors staying strong, selective re-entry seems likely. Investors should keep an eye on financial markets trends and policy changes to find good times to buy.

(1USD=KSh128)