UAE Emerges as Africa’s Top Investor

The UAE has solidified its position as Africa’s largest investor in new business projects, committing $110 billion (£88 billion) to various initiatives from 2019 to 2023, with $72 billion specifically allocated to renewable energy. This investment trend has outpaced traditional investors like the UK, France, and China, who are reducing their involvement in the continent.

Investment Focus Areas

The UAE’s investments primarily target green energy and infrastructure. African leaders have expressed appreciation for this financial interest, recognizing the urgent need for investment in energy transitions. The UAE’s strategy aligns with its goal of diversifying away from oil and gas reliance.

Key Players and Projects

Notable entities include Dubai’s DP World, which operates six African ports, and Abu Dhabi Ports, which has expanded into Guinea, Egypt, and Angola. A deal in Zambia saw a company linked to Sheikh Tahnoon bin Zayed acquire a 51% stake in Mopani Copper Mines for $1.1 billion.

Challenges Faced by Investments

Despite the ambitious plans, several projects encounter obstacles. A $34 billion green hydrogen initiative in Mauritania is still in the planning phase. Additionally, financial issues at Zambia’s state-owned ZESCO have stalled solar energy projects. Concerns about smuggling have also arisen, with reports indicating that $115.3 billion in unaccounted gold was exported from Africa to Dubai between 2012 and 2022.

As African nations increasingly depend on UAE financing, critics have raised alarms about potential risks. There are fears that heightened attention could encourage criminal activities, particularly in gold trading.

UAE’s Economic Positioning

Recently, the UAE’s Ministry of Economy reported that it is the top investor from the Gulf Cooperation Council (GCC) and the fourth-largest global investor in Africa. Over the past decade, the UAE has invested $60 billion in the continent and hosts over 21,000 African companies across vital sectors. Furthermore, the UAE serves as a major export market for African goods.

GKToday Notes:

1. GCC: The Gulf Cooperation Council consists of six Middle Eastern countries. It aims to encourage economic, political, and military cooperation. Established in 1981, it includes Saudi Arabia, UAE, Qatar, Oman, Bahrain, and Kuwait.
2. DP World: Dubai Ports World is a global logistics company based in Dubai. It operates ports and terminals around the world. DP World plays important role in international trade and supply chain management.
3. ZESCO: Zambia Electricity Supply Corporation is Zambia’s state-owned power utility. It generates, transmits, and distributes electricity. ZESCO has struggled with financial difficulties, affecting energy projects and supply stability in Zambia.