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

Russia’s war in Ukraine dealt a major blow to commodity markets, disrupting production and trade of several commodities, including energy, fertilizers and grains. These price increases came on the heels of an already volatile commodity sector, due to pandemic-related supply constraints.

According to the World Bank, disruptions to wheat exports from Ukraine affected several importing countries, especially those in North Africa, such as Egypt and Lebanon.

“Geopolitical interests are playing an increasing role, as many different international actors jostle for influence on the continent,” says Patricia Rodrigues, senior analyst and associate director for Africa at intelligence firm Control Risks.

African countries will likely maintain a high level of pragmatism when it comes to engaging with various geopolitical powers to guarantee FDI inflows, she adds.

Whether that guarantee comes to fruition remains to be seen. The 2021 growth momentum is unlikely to be sustained, UNCTAD warns. Overall, signs are pointing to a downward trajectory. Military coups, instability and political uncertainty in certain countries don’t bode well for FDI activity.

Take Kenya, for example. The country has a history of election-related violence and a lack of accountability for human rights abuse, according to Human Rights Watch. Investors shun the country—unlike Ethiopia, Kenya’s East African neighbor.

In fact, Kenya’s FDI decline brought it from $1 billion in 2019 to a mere $448 million in 2021. In July, it was ranked the second-worst country to invest in after Colombia by the World Uncertainty Index.

There’s also the ongoing repayment crisis between Africa and its biggest bilateral creditor, China, which holds 21% of the continent’s debt as of 2021, World Bank data shows. The International Monetary Fund (IMF) lists more than 20 African countries as being in, or at high risk of, debt distress.