Cash-rich Arab rivals vie to invest in Africa

In pursuit of geopolitical clout, in 2021 the United Arab Emirates (UAE) made a promise to expand aggressively into markets beyond its usual horizons.Since then, it’s pledged more investment in Africa’s economies than any other country and now jockeys for influence with established players like China and France.The wealthy Gulf state is piling in both through its government and private sector.It swooped in last month to save Egypt’s economy with a $35 billion deal — a figure representing 7% of the UAE’s annual economic output — and would be willing to invest a similar amount in a different African nation were a new opportunity to present itself, according to an official familiar with the Egypt bailout who asked to remain anonymous.While these Foreign Direct Investment (FDI) numbers count money pledged and not necessarily spent, based on the deals it’s witnessing, Africa’s largest bank said it’s also confident that the UAE will grow into one of the biggest sources of foreign investment on the continent over the next five years.Growth is “not linear,” the chief executive officer of Standard Bank Group Ltd Middle East and North Africa Rassem Zok said in an interview.As Chinese infrastructural funding tapers off and Western engagement wavers, Abu Dhabi’s cash flows have been coupled with a concerted diplomatic push: an approach mirrored to a lesser extent by its neighbors Saudi Arabia and Qatar.These ambitions have taken the UAE beyond the Gulf states’ historic North-African sphere of influence and from the nearby Horn of Africa into every corner of the continent.What the UAE’s been practicing through these deals is a kind of “network-centric statecraft,” said Andreas Krieg, a lecturer in Middle Eastern security issues at King’s College in London.The UAE pledged $52.8 billion in foreign direct investment in 2022, when it first topped FDI rankings, which exceeds Beijing’s contributions by 20 times and those of the US by seven, according to data from fDi Markets.That figure fell to $44.5 billion in 2023 — still nearly twice that of China, which came in second.It’s the country’s most visible presence in Africa, signing its first deals in the mid-2000s and inking its latest with Tanzania in October. In 2022, it bought South African firm Imperial Logistics for $890 million, providing it with access to logistics channels and warehouses across sub-Saharan Africa.But the UAE has also looked to Africa to compensate for its weaknesses, including its reliance on food imports.As part of efforts to become food secure, Emirati companies have scooped up agricultural land in Sudan, Zimbabwe and Angola, where Dubai Investments and Abu Dhabi-based E20 Investments in July signed a deal to develop 3750 hectares of rice and avocado farms — an area equivalent to around 5 500 football fields.These investments are focused mainly in renewable energy, logistics, technology, real estate and agriculture. After the Covid pandemic, the market “got rebased, in terms of valuations, so there is a very interesting entry point for a lot of investors now,” Standard Bank’s Zok added.Financial lifelineLast month’s Egyptian bailout extended the UAE’s strategy of offering African nations major financial lifelines, after it previously came to the aid of Sudan and Ethiopia.Alongside these deals, Abu Dhabi has signed a dozen investment treaties since 2019 with countries further afield, like Zambia, Zimbabwe and Democratic Republic of Congo.Beyond investment flows, the UAE has also played a role in Africa’s domestic political affairs. It backed Khalifa Haftar in the war for Libya, Ethiopian President Abiy Ahmed in his war against Tigray rebels, and, according to a leaked UN report, the Rapid Support Forces militia in Sudan, where a brutal civil war has created the world’s biggest internal displacement crisis and drawn accusations of war crimes. The UAE denies supplying the RSF with weapons.They include Egypt, Morocco, South Africa and Kenya, which in February became the sixth country to sign a special free-trade agreement with the UAE, following economic heavyweights like India and Indonesia.Dubai-based AMEA Power LLC, which is developing projects in more than a dozen African countries, plans to spend $1 billion on renewable projects on the continent this year.“They need power and they’re blessed with resources,” including abundant wind, solar and hydro, said Hussain Al Nowais, chairman of AMEA’s owners AlNowais Investments LLC. Copper, lithium and cobalt from central and southern Africa will be crucial both to the green-energy transition the UAE hopes to spearhead and to its efforts to diversify its own economy away from the oil and gas that fueled its rapid rise.Last November, International Holding Company, the $240-billion conglomerate controlled by the brother of President Sheikh Mohammed bin Zayed, paid $1.1 billion for a 51% stake in Zambia’s Mopani Copper Mines.

Cash-rich Arab rivals vie to invest in Africa

Kommentaar

Republikein 2025-06-17

Meld asseblief aan om kommentaar te lewer

Cash-rich Arab rivals vie to invest in Africa

Kommentaar

Republikein 2025-06-17

Meld asseblief aan om kommentaar te lewer

MELD AAN

Advertensie