In the past ten years, the Gulf Cooperation Council (GCC) has become a significant investor in Africa, leading to numerous trade deals that have greatly benefited both regions. Between 2012 and 2022, the GCC invested $101.9 billion in 628 projects in Africa, while African investment in the GCC during the same period amounted to $3 billion in 141 projects.
The UAE, in particular, has established numerous partnerships with African nations. In 2018, the Abu Dhabi Fund for Development financed over 66 projects in 28 African countries, with a total investment of $16.6 billion.
These investments have played a crucial role in driving Africa’s development agenda, creating employment opportunities, improving infrastructure, and boosting economic activity in 28 countries. They align with Agenda 2063, which is Africa’s blueprint for inclusive and sustainable development.
Bilateral trade between the UAE and African countries has also been growing. The UAE ranks among the top ten importers of goods and commodities from ten African countries, indicating the strengthening trade relationship between the regions.
The proximity and logistics advantages of the Middle East/Africa corridor have contributed to the economic opportunities presented by this partnership. African businesses are increasingly choosing the UAE as a base of operations, with 1,600 new African member companies registering with the Dubai Chamber of Commerce since October 2021. This demonstrates the opportunities for African companies to use the UAE as a launchpad for international engagement and global export opportunities.
Energy and infrastructure are key focus areas in these partnerships, with investments in these sectors also aligning with the UAE’s Net Zero strategy.
To illustrate the energy challenges faced by many African nations, Zambia is experiencing a significant drop in water levels in Lake Kariba, severely impacting its energy production. In response, the UAE signed a deal with Zambia to develop solar projects that will generate an additional 2000 MW of electricity, addressing the country’s energy needs.
While financing constraints hinder some African nations from transitioning to cleaner forms of energy, there is a significant opportunity for alternative energy companies and investors to contribute to Africa’s green investments in renewable energy technologies. The potential for micro- and off-grid renewable systems is immense, and the private sector can play a substantial role in achieving net zero goals.
Besides energy, the UAE and other GCC countries have made substantial investments in sectors such as agriculture, mining, telecommunications, infrastructure, real estate, and hospitality in Africa. Land acquisitions have reshaped the economic landscape, with notable deals including Saudi Arabia’s acquisition of 500,000 hectares in Tanzania and the UAE’s purchase of 400,000 hectares in Sudan. Qatar also secured 40,000 hectares from Kenya in exchange for a $2.5 billion loan to support the construction of a deep-water port.
Recognizing the pressing issue of food security, the UAE has established trade ties with Kenya, which has a rich agricultural sector. By importing agricultural products such as tea, coffee, spices, fruits, and nuts from Kenya, the UAE aims to address its vulnerabilities in food supply while presenting opportunities for Kenya to leverage its agricultural strengths.
The growth of trade between Kenya and the UAE has seen a nearly ten-fold increase over the past decade, benefitting both economies. Kenya’s agricultural sector contributes approximately 33% to its GDP, emphasizing its importance in the country’s economic transformation.
Two of the main factors hindering socio-economic development in Africa are domestic buying power and limited access to capital. Initiatives such as the UAE-Africa Investment Forum and the UAE-Africa Business Summit have facilitated dialogue, networking, and business collaborations, and now, bilateral trade with the GCC is playing an increasing part in changing that. Africa has the youngest, fastest-growing, and fastest-urbanising population in the world, with an estimated one billion people, that is set to double before 2050. The GCC is poised to play a huge part in their future.
