Tremendous opportunities await foreign direct investors, but geopolitical issues, China’s lending practices and human rights violations may stymie that potential.

In 2021, Africa witnessed an unprecedented rebound in foreign direct investment (FDI). According to a recent report from the United Nations Conference on Trade and Development (UNCTAD), which tracks globalization efforts in developing countries, FDI flows into Africa reached $83 billion. This was a record high from the $39 billion recorded in 2020, when the Covid-19 health crisis devastated the world economy.

Even though this accounts for just 5.2% of global FDI, which stood at $1.5 trillion, the uptick in deal volume underscores just how quickly Africa is changing—and the roles foreign investors are playing as catalysts of change.

“We see tremendous opportunities for the United States to invest in Africa’s fast-growing markets,” says Alice Albright, CEO of Millennium Challenge Corporation, a foreign aid agency established by Congress in 2004.

Indeed, the U.S. has a renewed focus on the region, considering that President Joe Biden resurrected the US-Africa Leaders’ Summit, a three-day event beginning Dec. 13 in Washington DC. The last time the Summit was held was in August 2014.

While the US is largely playing catch-up in Africa, Europe has been—and continues to be—the largest holder of foreign assets in Africa, UNCTAD noted. The two EU member states with the most investor activity in the region are the UK and France, with $65 billion and $60 billion in assets, respectively.

Other global economic powers—China, Russia, India, Germany and Turkey, among others—are also inking deals across the continent.