Across frontier markets globally, from Sierra Leone to Nepal, a pattern persists. Just as firms are poised to scale, financing dries up. The demand exists, but farms, factories, and other businesses can’t access the finance they need to succeed. Capital bypasses high-impact opportunities precisely where it could be most transformative.
This is not a marginal problem. Data shows that frontier markets, classified as the Least Developed Countries by the UN and home to one billion people, receive less than 1% of global foreign direct investment. However, they represent a fair share of future global demand and 13 % of the world’s population.
This is not just an economic challenge. It strikes at the heart of the global promise to leave no one behind under the Sustainable Development Goals (SDGs).Yet, millions of people in the world’s poorest countries continue to be held back by structural barriers and chronic underinvestment.
This is further exacerbated by heightened geopolitical uncertainty and conflict, which is creating volatility across the markets where we operate and highlights how vulnerable frontier markets are exposed to external shocks across energy, food security and global supply chains.
The obstacles to investing in frontier markets are real. But when long-term capital is paired with strong partnerships, technical assistance and the right financial instruments, these economies can become powerful engines of growth that benefit everyone.
Why frontier markets need long-term capital
British International Investment’s (BII) experience across Africa and Asia shows that frontier markets hold substantial long-term growth potential, driven by young workforces, rising consumer demand and rapidly deepening digital ecosystems. In countries like Sierra Leone, increasing urbanisation is driving new commercial demand, which could grow quickly if capital is directed into productive sectors of the economy.
This opportunity needs patient investors who can engage early, manage uncertainty, and think long-term in markets that are still taking shape. Across Africa many emerging markets are actively working to improve the ease of doing business to uncover opportunities for investors, but they cannot do it alone.
Partnerships turn potential into investibility
Capital alone is not a silver bullet. Finance needs to be underpinned with progressive partnerships, which means working alongside local banks, regulators and enterprises to strengthen the wider financial and business ecosystem. These partnerships help to reduce fragmentation, build predictability and establish the trust on which private capital ultimately depends.
This is the approach behind the African Resilience Investment Accelerator (ARIA), a DFI coalition led by BII, FMO, the Dutch development bank and Proparco, the French development institution. ARIA brings investors and institutions together to address the early-stage barriers that deter private investors and signal that frontier markets are investable.
Technical assistance builds markets and pipelines
In frontier markets, capital also needs to be paired with technical assistance to unlock investment.
Technical assistance helps businesses, financial institutions and markets become investable by raising environmental, social and governance (ESG) standards, improving financial transparency, and covering early preparation costs that often make frontier-market opportunities seem commercially unattractive to investors. By dealing with hurdles upfront, this helps create strong project pipelines and boosts long-term investor confidence.
ARIA embeds technical assistance across its approach, helping to turn early-stage opportunities into investable projects and enabling capital to flow at scale into overlooked areas.
Through Invest for Impact Nepal, a partnership between BII, FMO and the Swiss Agency for Development and Cooperation, early interventions focused on removing structural barriers and improving investment readiness. As a result, these efforts helped increase foreign investment into Nepal’s financial sector from c.$75 million in 2020 to more than $850 million in 2025, demonstrating how targeted market shaping support can unlock capital in frontier economies. Last year BII committed £880 million to the poorest and most fragile countries where we invest – in Africa and Asia. BII provides innovative finance where too many ignore.
Financial instruments unlock scale
Finally, frontier markets require financial instruments that match their realities. Flexible structures, including mezzanine finance, long tenor debt, guarantees and blended finance, are often better suited than standard products designed for more mature markets.
As the OECD’s blended finance principles show, it is the combination of these instruments with technical assistance that mobilises significantly more private capital than standalone tools. ARIA is already demonstrating this as it is successfully attracting investment into high impact sectors such as SMEs, agriculture, clean water and energy in countries like Sierra Leone.
The opportunity ahead
Frontier markets are at the centre of the next wave of global economic expansion. They combine young workforces, rising consumer demand, and entrepreneurial ambition with plenty of room for productivity to grow.
Early investors will help set the rules and incentives that define these markets. Smart, early capital won’t just adapt to what’s coming, it will help shape it.
As we enter our new five-year strategy cycle, will invest up to £8 billion, and aim to crowd in a further £7 billion from commercial capital. We’re also deepening our long-term commitment to frontier economies by directing at least 25 per cent of new investments to these countries. We’re strengthening our partnerships in areas that have both the greatest need and undeniably huge potential.
Chris Chijiutomi is the managing director and head of Africa, British International Investment