The Annual Report, published in a new format for the first time this year, includes a foreword by FSB Chair Andrew Bailey, who is also the Governor of the Bank of England. He said that in an increasingly fragmented and unpredictable world, where multilateralism is being tested, FSB members continued to find common ground and demonstrated commitment to addressing shared challenges, giving reason to be optimistic.

The FSB Chair notes that “the shocks of recent years have not undermined financial stability,” a testament to the reforms put in place since the global financial crisis.

Andrew Bailey also noted that the Financial Stability Board must continue to evolve to be fit for purpose in an ever-evolving world, a theme that will continue to guide the international body’s work. Also, the second phase of the Financial Stability Board strategic review of implementation will further address how to identify the causes of a slowdown in G20 reform implementation and how to encourage implementation more effectively.

As outlined in the body of the Annual Report, in 2025, the FSB, through its membership and in collaboration with international standard-setting bodies, continued to strengthen financial systems, enhance the resilience of global financial markets, and improve implementation of policy recommendations across industries and jurisdictions. Several longstanding vulnerabilities in the financial system during its ongoing surveillance, including rising sovereign debt levels and the rapid growth of Non-Banking Financial Institutions (NBFI).

In response, the Financial Stability Board completed work to address the financial stability risks related to leverage in NBFI and created the “Nonbank Data Task Force” to address data issues that prevent authorities from effectively assessing vulnerabilities in NBFI.

The FSB also reviewed the progress in implementing the 2023 global regulatory framework for crypto-assets and stablecoins, calling on authorities to address gaps and inconsistencies that could pose risks to financial stability. Regarding operational vulnerabilities, the FSB finalised an operational incident reporting exchange format.

The Financial Stability Board has emerged as the global standard setter for the resolution of financial institutions, and in 2025, it continued its work on this front to support authorities’ preparedness to respond to failures, including the production of policy guidance and enhancements to operational planning.

Image Credits: Bank of England

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After World War II and the division into East and West Germany, the country was largely demilitarised and focused on economic reconstruction under the security umbrella of the United States and the Soviet Union, and later under NATO.

With the end of the Cold War, much of Europe came to believe that large-scale continental war was behind them. However, Europeans had a wake-up call, first with the conflicts in the Balkans, followed by the Russian annexation of Crimea in 2014, and the invasion of Ukraine on February 24, 2022. The war in Ukraine is a frozen conflict in its fourth year of devastation.

Europe’s rearmament is being driven by two major forces. Firstly, fear of an expansionist Russia and, secondly, growing doubts about whether the United States, under Donald Trump’s more isolationist approach, would fight on Europe’s behalf.

The age of European pacifism is ending. Germany, Poland, and other states are rearming, while France and the UK remain active military powers. Ukraine, forged by years of war, has become the continent’s most experienced military and a testing ground for 21st-century warfare.

With the US-Israel’s war with Iran, and the closing of the Strait of Hormuz, the great powers of Europe hesitantly find themselves in the Indian Ocean with fleets and submarines.

Great Shadow Of The Military Industrial Complex

The world seems to be in a security crisis. Heads of state are being abducted or assassinated (Venezuela and Iran). The sovereign territory of one nation is being invaded and annexed by another (the Ukraine war). There are accusations of genocide or ethnic cleansing (Israel-Palestine). And, the fight for resources, especially energy, is entering a new phase. Global economies are bracing for $200 a barrel. But even in war, there is money to be made.

Defence spending in EU member states has risen from €218 billion in 2021 to €381 billion in 2025. According to the International Institute for Strategic Studies (IISS), Europe accounts for around 21% of global military spending, which means more than one-fifth of the global military budget is now in Europe (a region that America took great care to ensure doesn’t rearm or militarise for the longest time).

It began as an emergency response to what was happening in Ukraine, a reaction to perceived Russian aggression. It quickly turned into structural rearmament as European governments grew more doubtful about the durability of US security guarantees.

Ursula Von Der Leyen, President of EU Commission, introduced REarm Europe on March 2, 2025, to EU member states. The new REarm Europe/ Readiness 2030 plan is an €800 billion framework in which members will push defence spending from 1.9% of their GDP in 2024 to 3.5% by 2030. The EU initiated a €150 billion loan programme titled ’SAFE’ (Security Action for Europe) to support joint weapons procurement, with projects generally requiring that no more than 35% of component costs come from outside the EU, the EEA-EFTA states, or Ukraine.

Additionally, €1 billion will be allocated to the European Defence Fund in 2026 for research and development, primarily for hypersonic missile defences, drone swarms, and next-generation tanks.

Rheinmetall CEO Armin Papperger told Reuters: “A new era of rearmament has commenced in Europe,” and that it brings “unprecedented growth opportunities” for the company.

Not too long ago, defence contractors in Europe struggled to convince governments to increase the budget and procurement. Now, supply chains and even politics can’t seem to keep up with the demand.

The Doves Slowly Turn into Hawks

The EU Parliament and think tanks believe that the EU’s defence budget has risen 63% since 2020. The estimate for 2025 was €381 billion, amounting to about 2% of the bloc’s GDP.

The EU spent around €88 billion in 2024 on equipment procurement. This number was at €130 billion in 2025, while R&D is said to have risen from €13 billion to €17 billion at the same time.

There have been accusations about Germany underspending for many years. Understandably so, because German militarisation was more frightening than a stingy defence budget for most of the world. However, Germany is now the biggest spender in Europe, and has answered its critics by sharply expanding its defence budget, with spending projected to rise to €162 billion by 2029. This would represent approximately 3.5% of GDP.

The Baltic and Scandinavian states are also splurging money to harden NATO’s eastern flank. They are especially energised because they share land borders with Russia.

On February 15, Ursula Von Der Leyen tweeted: “We need a surge in defence spending. Europe must bring more to the table. I will propose to activate the escape clause for defence investments. It will allow member states to substantially increase their defence expenditure, in a controlled and conditional way.”

There is a ’national escape clause’ in the bloc’s fiscal rules, which allows for an additional 1.5% of GDP to be spent on defence without budgetary constraints. Furthermore, the SAFE facility enables €150 billion in joint borrowing to finance cross-border projects and encourage European governments to purchase European weapons rather than ammunitions, drones, tanks, and missiles from the United States, Israel, or Japan.

The bond markets and investors are happy. Not so long ago, environmental, social, and governance (ESG) portfolios did not include defence. But now, because of hard security shocks, defence has been rebranded as a public good on par with environmental conservation.

Europeans, once again, are beginning to see war as an inconvenient necessity rather than an evil to be avoided.

War Is Good Business

Armin Papperger wrote on the company’s official X account: “Defence is now by far the most dynamic sector of German industry.”

Europe’s Aerospace and Defence Index has surged over the past year, reflecting investor enthusiasm for the sector. Fitch Ratings estimates that the eight largest defence companies are seeing at least a 15% increase in demand from 2024, and their combined cash flow is at a record-breaking €8 billion.

Germany’s Rheinmetall is acquiring US-based Loc Performance Products for $950 million. In France, Safran is buying the AI defence firm Preligens for around €220 million so that it can have better surveillance and data analysis capabilities.

Even startups like the Europe-based Helsing is raising €600 million in a Series D round for their state-of-the-art drone and electronic warfare systems, which are AI-operated.

Investment managers and law firms are jubilant as SAFE brings cheap credit to the European military-industrial complex, with experts expecting increased funding for missiles, armoured vehicles, and aircraft. Resources will also be allocated to neotechnologies, such as quantum secure communication, space-based surveillance, and autonomy.

This trend is projected to drive countless cross-border mergers and joint ventures well into the 2030s.

Too Slow To Make Bombs

Europe is throwing money at the problem, hoping to be prepared for an inevitable showdown with Russia. But money can’t make missiles, shells, and drones by itself. European factories are ramping up production, but there are bottlenecks and serious limitations to output capacity.

Economists at BNP Paribas believe that the bloc can transform its underutilised industrial capacity, which was once used for automotive and adjacent sectors, for defence production. The defence output would be raised by 0.5 percentage points to annual GDP growth in the mid-2020s. That growth is not just going to come from weapons, but also from metals, electronics, and machinery required to make them.

Additionally, the SAFE initiative, which demands procurement from within Europe, and investor enthusiasm might revitalise factories that were once closed for defence manufacturing.

The European Defence Fund has grand plans, but full-scale production won’t start until early 2030, even though Ukraine is running out of ammunition and drones at an unprecedented rate.

Europe is trying to buy off-the-shelf systems while setting up its own, while also scaling up its existing lines.

The Side Effects Of Defence Spending

There are conflicting opinions from economists on how increased defence spending will affect the economy.

Filippo Taddei, senior European economist at Goldman Sachs, told Reuters that extra defence spending will support European growth, in particular, support European industry at a time when they are particularly struggling.

Carsten Brzeski, ING’s global macro head, said: ’increased defence expenditure results in a negative multiplier effect on growth’ in the short term.

Klaas Knot, head of the Dutch central bank, said, “A temporary fiscal exemption for higher defence spending is justifiable, but warned that public debt in the EU remained excessively high.”

If you focus too much on war, you risk deprioritising other sectors (essential sectors such as education and healthcare). There is also the risk of inflation and higher interest rates.

Europe is infamous for its expensive welfare system and green transition programmes. If they pile up military outlays on top of that, the continent could see a backlash from voters who struggle to make ends meet.

There is also a lot of debate about the inequality within the bloc. Bruegel and other think tanks analysed ’Rearm Europe’, and believe that the move would largely benefit national governments instead of the EU as a whole. For example, rich nations like Germany and the Netherlands will borrow cheaply and aggressively invest in weapons manufacturing, while Eastern and Southern Europe will find themselves in unsustainable debts, or incapable of militarising at a pace on par with their wealthy counterparts.

Europe’s political and cultural rebranding of making defence an ESG-compatible investment is still on the debate floor.

Institutional investors are arguing that supplying democracies with weapons to defend against tyranny is ethical and consistent with the EU’s vision.

But, many are afraid of dual-use technologies that will later be exported to poor countries with questionable human rights records. There is already a lot of uproar towards sending weapons to Saudi Arabia and Israel.

The ethical complexity of the issue is likely to affect industrial growth, even though the weapons manufacturing sector is seeing a boom.

An End To Reliance On External Security Umbrellas

Europe is beginning to understand that pacifism and reliance on external security umbrellas might not cut it. True safety and security come from self-reliance. The wars in Ukraine and Russia are stark reminders of a return to armament.

Despite throwing money at the problem and having the potential to have outstanding armies by the end of the decade, there are still several challenges that governments must navigate.

For starters, there are the industrial bottlenecks. Not all the money in the world can create missiles, artillery, and drones instantly. There are supply chain problems and production limits that are to be overcome gradually.

There is also the economic inequality and in-bloc politics that might arise because of a re-armed Europe, as Eastern and Southern states might find themselves drowning in debt, while nations like Germany and the Netherlands might make a profit through the rapid militarisation race.

Europe has long positioned itself as the most ethical society on earth. Making defence an ESG-compatible public good is highly controversial in European societies, and many see it as a means to pour government funds into the military-industrial complex.

Regardless, money is being poured into the military establishment, factories are reopening, and war looms on the horizon.

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According to Greggory Warren, senior stock analyst at Morningstar, sector sentiment has soured in the last few months. Retail investors are increasingly looking to get their money back from even established entities like BlackRock’s USD 26 billion HPS Corporate Lending Fund (HLEND), which were designed to be open to wealthy individuals.

“It should serve as a warning sign for the industry and the rulemakers about the downside of illiquid funds for retail investors,” he told Reuters.

Also, developments like bankruptcies of a US auto parts supplier, First Brands Group, a subprime auto ⁠lender Tricolor, and London-based property lender Century Capital Partners, have raised questions about the lending industry and operational standards in general. In this backdrop, increasing withdrawal requests have reportedly prompted rival Blackstone to lift the usual 5% redemption limit on a USD 82 billion fund to 7%, while the asset manager and its employees invested USD 400 million to allow all requests to be met.

Alternative asset manager Blue Owl, which has a 36-million-pound (USD 48 million) exposure to Century Capital Partners, reportedly bought back 15.4% of one of its funds in January 2026, two months prior to the British property lender entering bankruptcy. In fact, as per Bloomberg, Blue Owl, which manages USD 307 billion in assets, financed the riskiest slice of loans originated by Century, a bridging lender focused on high-end central London property.

Coming back to HLEND, the latter received withdrawal requests worth USD 1.2 billion in the first quarter, roughly 9.3% of its net asset value. It has now informed the investors about paying out USD 620 million as part of the quarterly redemption, hitting the 5% threshold that is the industry standard point, at which managers of these funds can restrict further withdrawals.

“The biggest risk for the alternative asset managers is that a marked increase in loan defaults on the part of their borrowers has an adverse effect on investment performance, which impacts future fundraising and monetisations,” Warren said, while talking about the Blue Owl episode.

HLEND stated that its loans have primarily been devised to mature private companies with stable cash flows. These financial products are also structured according to the “paid back first” principle; if the borrower goes bankrupt, apart from paying monthly dividends. Some 19% of HLEND’s portfolio is tied up in software, another sector ⁠that has been hogging the limelight for aggressive selling as investors fear AI-related disruptions.

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Asialink has been a market leader in the Philippines’ finance industry for 28 years, supporting MSMEs, the backbone of the economy. Its financing solutions specifically cater to small, individually run enterprises and growing women-led businesses, enabling sustainable growth while addressing the ever-changing financing needs of their MSMEs. The recognition by the International Finance Awards, along with other global honours, further demonstrates the quality of the company’s services, which present inclusivity and excellence in supporting MSMEs through innovation, reach, and measurable economic impact.

Samuel Cariño, President and CEO of the Asialink Finance Corporation, said, “As a company committed to delivering accessible and reliable financial solutions, we are honoured to be recognised as the Best SME Finance Company and Best Auto Financing Company. These recognitions are not just milestones; they reflect our purpose and mission to empower Filipino entrepreneurs and individuals. They also serve as motivation to continue raising the bar, innovating our services, and exploring new ways to support the growth of our clients and communities. As we continue to expand our reach, we remain steadfast in our mission to innovate, serve with integrity, and help more Filipinos move forward with confidence.”

The company’s recognitions reflect years of consistent effort to bridge financing gaps, particularly for underserved segments facing limited access to formal credit. By December 2025, the company had released P16.6 billion in loans, a figure expected to grow steadily in 2026, highlighting strong demand and sustained trust from the Filipino communities the business serves.

A key pillar of Asialink’s SME strategy has been inclusive finance, particularly through initiatives supporting women entrepreneurs. The company launched the Women’s Access to Inclusive Support (WAIS) Loan, a programme providing financial tools for women-led enterprises in the Philippines to scale operations, manage challenges, and create long-term impact.

“We’ve seen how women entrepreneurs continue to push forward even in the most challenging times. Their strength, grit, and passion drive their own success and the growth of communities around them. Supporting women in business means investing in progress that uplifts families and fuels the nation’s economy,” Samuel Cariño told the International Finance.

Asialink recognises that many entrepreneurs build businesses to support families, strengthen communities, and create opportunities. By offering flexible, customer-centric financing, the company enables MSMEs to pursue growth that’s both economically viable and socially responsible.

“This year has been monumental for us at Asialink—marked by major milestones, meaningful partnerships, and the continued trust of the communities we serve. From empowering MSMEs and women entrepreneurs to celebrating industry recognition, our achievements are made possible by the dedication of our team and the confidence of our clients and partners,” the CEO noted.

Looking ahead, Asialink plans to expand its influence and impact across the region. According to Eleanor Yap, the company’s Chief Operating Officer (COO), Asialink will sustain momentum through strategic expansion, digital transformation, and people’s development.

“Asialink plans to maintain and grow its influence by exploring new markets and sectors, strengthening engagement with clients and partners, and continuously investing in technology and our people. This recognition inspires us to improve our systems further, introduce initiatives that support sustainable development, and empower businesses to thrive,” Eleanor Yap remarked.

Asialink’s recognition accentuates its continued role as a trusted partner to growing businesses and individuals. The company remains focused on making financing more accessible and relevant, helping MSMEs move forward and creating a positive impact for entrepreneurs, communities, and the economy they support.

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With a total score of 63.80 out of 100, the Sultanate has been officially placed in the “Favourable Outlook” category, signalling its strength as a stable and attractive destination for international capital.

The score, which looks at 226 countries, compares a country’s ability to adapt and recover to its exposure to geopolitical, economic, and climate hazards. Oman’s performance is characterised by a strong resilience rating of 55.05. Its risk score is exceptionally low at 27.5.

Based on the data, the nation has one of the lowest rates of political instability, inflation, and currency volatility in the world. Although physical vulnerability to the climate is still the main obstacle, the Sultanate’s strong institutional framework offers a sizable cushion for long-term growth.

The paper identifies many important factors that support Oman’s stability. The country demonstrated a great ability to control public debt while preserving a stable social environment by achieving high scores of 0.78 for fiscal policy room and 0.75 for social advancement.

Additionally, a transparent and trustworthy environment for international corporate interests is highlighted by constant ratings of 0.58 for external accounts and investments, backed by a 0.55 rating for governance quality.

Oman is ranked higher than Bahrain and lower than the United Arab Emirates, Qatar, Saudi Arabia, and Kuwait in the GCC (Gulf Cooperation Council). Switzerland and Denmark topped the worldwide score, demonstrating how smaller, more adaptable nations are increasingly serving as the cornerstones of global resilience.

According to the report’s conclusion, in a more unstable global economy, countries most dedicated to fostering resilience via innovation and governance will continue to draw the best talent and investment.

Dr Christian H Kaelin, Chairman of Henley & Partners, told the Muscat Daily, “This index is a new, useful tool in understanding where true sovereign risks and resilience lie. For investors, companies and global citizens, it offers unprecedented clarity on where to place confidence and capital in the years ahead.”

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This development adds a new chapter to the battle over state gaming regulators’ ability to police companies like Kalshi, which allow users to place financial bets through their prediction markets.

The battle is set to escalate in the coming years, as the lawsuit came the same day the Commodity Futures Trading Commission threw its support behind companies like Kalshi, arguing it has exclusive jurisdiction over prediction markets.

While Kalshi fought legally in recent months to prevent Nevada regulators from filing a case against the prediction market operator, a federal appeals court declined on February 17 to put on hold a judge’s November 2025 order dissolving an injunction that had previously prevented Nevada authorities from pursuing enforcement action.

If Nevada succeeds, it will become the second state to secure a court order blocking Kalshi from offering sports event contracts, following a Massachusetts judge’s injunction issued at the behest of the desert state’s attorney general on February 5. That injunction was set to take effect in 30 days, but a state appeals court justice put it on hold.

In its lawsuit, Nevada stated that offering sports event contracts, or certain other event contracts, constitutes wagering activity under Nevada state law, and due to this, Kalshi must be licensed. The authorities further accused the prediction market operator of not complying with state gaming regulations, including those prohibiting anyone under 21 from placing wagers and requiring entities accepting wagers on sports events to deploy safeguards against wagers by insiders, like players and match fixing.

The state has already convinced judges to issue orders barring two other prediction market operators, Coinbase and Polymarket, from offering event contracts. Nevada is seeking to have a state court judge issue a similar temporary restraining order against Kalshi, but the company, soon after Tuesday’s (February 17) case was filed, sought to transfer it to federal court, arguing the case raised a matter of law over whether it was subject to the CFTC’s exclusive jurisdiction.

On its part, Kalshi believes that only the federal regulator has sole jurisdiction over its event contracts as they are a form of swaps, a type of derivative contract.

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“We estimate about half of their total funding, including debt and capital, has been financed by the Public Investment Fund. Recourse to bank borrowing is low but has been increasing. We expect banks’ giga-project financing to rise as projects approach operational phases and financing can be supported by cash flows,” the rating agency said.

Fitch estimates that bank financing to giga projects was a modest 5%-7% of average sector loans at end-2025. New project awards fell by almost 50% in 2025, but the value of contracts awarded since 2022 is about USD 435 billion, providing significant business opportunities for banks. This should put total exposure to giga projects, both on- and off-balance-sheet, below 10% of the sector’s combined credit risk, the report claimed.

“Delays in giga-project execution or substantial recalibration of their scale could affect the banking sector’s asset-quality metrics in the longer term. However, current low exposure means the projects are unlikely to lead to significant increases in system-wide Stage 2 and Stage 3 loan ratios in 2026-2027,” the report said.

Fitch expects financing requirements for broader “Vision 2030” diversification projects to translate into sustained strong bank loan growth, despite the announced recalibration.

“This will, in turn, drive greater diversification of Saudi banks’ funding sources, underpinning further growth of Saudi Arabia’s debt capital markets, including international issuance,” the agency continued, while adding, that Saudi banks’ exposure to these giga-projects remains modest but is likely to rise as some projects become operational.

“We expect banks’ giga-project financing to rise as projects approach operational phases and financing can be supported by cash flows. We believe this type of financing mostly carries risk-weighting of around 80%-130%, so greater lending to these initiatives could weigh on capital. This, coupled with more stringent capital regulation, could encourage banks to make greater use of tools such as residential mortgage-backed securities (RMBS) and significant risk transfers (SRTs) to relieve pressure on capital ratios, or to adjust their dividend payouts,” Fitch remarked.

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The official launch took place on February 7 at the Grand Egyptian Museum, attended by Prime Minister Mostafa Madbouly, Minister of Planning and Economic Development Rania Al-Mashat, key members of the entrepreneurial ministerial group, the governor of Giza, ambassadors, and various stakeholders from the startup ecosystem and venture capital funds.

“The Startup Charter represents a strategic framework to enhance the capabilities of startups and the entrepreneurial ecosystem, aiming for rapid, sustainable economic growth driven by competitiveness and innovation, while also contributing to job creation. The initiative follows over a year of consultations involving 15 national entities and more than 250 representatives from the startup ecosystem, entrepreneurs, and parliamentary bodies,” according to an official statement from the Egyptian Cabinet. As outlined by the “Ministerial Group for Entrepreneurship,” the charter is designed to support up to 5,000 startups, generate an estimated 500,000 direct and indirect jobs, and accelerate international expansion.

Egypt’s startup ecosystem has gained significant traction in recent years, with ventures attracting USD 228 million in venture capital and debt financing during the first five months of 2025 alone, marking a notable increase from the 2024 situation. Official figures indicate that total funding for the sector reached USD 614 million in 2025, a sign of growing investor confidence and a more diverse financing landscape.

The charter has set out several key objectives over the next five years, including accelerating startup expansion into international markets, developing local talent to combat brain drain, promoting venture capital, and attracting investments through a unified financing initiative. It also seeks to connect critical challenges in various sectors with innovative solutions from startups.

While describing the reform as the first step toward modernising Egypt’s policies and legislation to better support startups, Al-Mashat further emphasised that the charter is not just a theoretical document but a practical and adaptable tool that will evolve to meet technological advancements and market needs. She further highlighted that the priorities of the charter were determined after extensive consultations with key stakeholders, aiming to create a dynamic and sustainable business environment that fosters innovation and attracts investment.

One key feature of the “Startup Charter” is the introduction of a unified definition of startups, newly established companies with a focus on rapid growth, flexibility, and innovation. This definition will allow startups to access a range of incentives and benefits, including official classification certifications from small and medium enterprise authorities.

“Additionally, it includes a unified financing initiative designed to coordinate available funding resources from government entities. The initiative aims to amplify the impact of these resources by up to four times, to mobilise USD 1 billion over the next five years through government-backed guarantees, joint investments with venture capital funds, and collaboration with private-sector investors,” Arab News reported.

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As Gulf countries ⁠diversify their economies away from oil, investing billions in sectors like financial services, hubs ⁠like the Dubai International Financial Centre have ‌been attracting an increasing number of companies. The total number of actively registered firms at the centre stood at around 8,840 ⁠as of the end of December 2025, up 28% from 2024. Active company registrations also increased by 2,525, a rise of 39% from the 2024 tally.

These included 557 wealth and asset management firms, which in recent years have been setting up base or ⁠expanding their footprint in Dubai and neighbouring Abu Dhabi as the UAE attracts high-net-worth individuals, helped by factors such as the relative ease ‍of doing business and low tax status.

“We had a slight uptick in the UK, and that probably has been a reflection of the growth in hedge funds that have been brought from that country,” DIFC Governor Essa Kazim told the media, while speaking about the geographical breakdown of firms at the centre. The Dubai International Financial Centre, meanwhile, is set for an around USD 27 billion expansion to be delivered by 2040, with the hub reaching full capacity, apart from seeking to welcome new firms.

Asked about funding for the project, Kazim said that the Dubai International Financial Centre achieved ⁠a net profit of around USD 400 million in 2025, remarking, “That is really the future cash flow that will contribute to the expansion, together with internal resources as well as a potential return ‌to capital ⁠markets. Definitely, the market is open. In the past, we issued sukuk, and that’s ⁠one possibility.”

In terms of operational profits, DIFC reported record annual results for 2025, posting double-digit growth in company registrations, revenue and net profit. Combined revenues rose 20% to Dhs2.13 billion (USD 580 million) in 2025 from Dhs1.78 billion in 2024, while net profit increased 28% to Dhs1.48 billion from Dhs1.16 billion. Dubai International Financial Centre has remained the region’s largest regulated financial services ecosystem, with 1,052 financial services firms operating in the hub.

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The performance underscores Egypt’s relative resilience at a time when FDI inflow into Africa has normalised following an unusually strong 2024, which UNCTAD said was inflated by a single large project. As a result, the 2025 data reflects a return to more typical investment levels across the continent.

“Among African economies, inflows to Angola reached an estimated USD 3 billion, marking a return to positive values after nine consecutive years of net divestments. Egypt, with inflows of USD 11 billion, remained the largest FDI host country in Africa,” the report stated.

While Egypt solidified its position as Africa’s leading FDI host, other notable performers on the continent included Mozambique, where inflows surged 80% to USD 6 billion, driven by renewed activity in major liquified natural gas projects. Angola too saw a positive shift, recording an estimated USD 3 billion in FDI after nine consecutive years of net divestments.

As per UNCTAD, Egypt’s strength extended beyond headline inflows, with the country also contributing to an increase in greenfield investment activity across Africa. While the number of greenfield projects fell globally and across lower-income economies, Africa recorded a 5% increase in project numbers in 2025, supported in part by growth in Egypt and Côte d’Ivoire.

“Globally, FDI flows rose by 14% in 2025 to approximately USD 1.6 trillion, though growth was heavily concentrated in developed economies, which saw a 43% increase. In contrast, flows to developing economies declined by 2%, with the least developed countries particularly affected; three-quarters experienced stagnant or falling investment,” reported the Arab News.

The report highlighted that new project announcements remained weak globally amid elevated policy uncertainty, with international project finance declining for the fourth consecutive year.

Looking ahead, UNCTAD sees geopolitical tensions, regional conflicts and economic fragmentation continuing to suppress real investment activity in 2026, even as financing conditions are expected to ease. For Africa, sustaining steady FDI inflows will require navigating persistent challenges such as financing constraints, risk perceptions, and structural vulnerabilities.

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