World Bank reports sharp drop in frontier market investments in 2020s
The bank notes that these economies, mostly composed of middle-income nations, have largely failed to reach their potential in recent years. “Yet the experience of the top performers among frontier markets reveals lessons for the 56 economies currently in the cluster,” the statement adds.
Since 2000, frontier markets have made little progress in attracting capital, with per capita investment growth gradually slowing over the last 25 years to just 2% in the 2020s. Currently, these economies account for only 3.1% of global capital inflows and less than 5% of global economic output.
More than a third of frontier market economies are located in Sub-Saharan Africa, many of which possess mineral resources critical for emerging technologies in renewable energy, telecommunications, and consumer electronics.
World Bank chief economist Indermit Gill remarks, “Excluding a handful of economies that have become investment grade over the past 25 years, frontier markets may well be the biggest disappointment in economic development.”
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