UAE is pouring money into Africa, seeking resources and power

Straits Times

17-05-2025

Persian Gulf investments in Africa, primarily by the United Arab Emirates, have exploded in recent years. PHOTO: REUTERS
Look at the chief economic and strategic spots across Africa – ports for key trade corridors, mines that produce critical minerals, large renewable energy projects – and you will find the United Arab Emirates.
As the United States and, to a lesser extent, China reduce their investment, aid and presence on the African continent, the Emirates is using its enormous wealth and influence to fill the void.
Persian Gulf investments in Africa, primarily by the Emirates, have exploded in recent years. Since 2019, US$110 billion (S$143 billion) worth of deals – mostly by firms tightly aligned with the ruling powers – have been announced, dwarfing amounts pledged by any other country.
'The UAE is turning into a dominant foreign player' in much of Africa, said Ms Anna Jacobs, a non-resident fellow at the Arab Gulf States Institute in Washington.
Its efforts to become a world leader, particularly in finance and technology, are likely to be bolstered under President Donald Trump, Ms Jacobs said. The president, seeking to draw Emirati money to the United States, paved the way this week for the sale of American advanced artificial intelligence chips to the Emirates.
The Emirates' wide-ranging investments and efforts to become a world leader in AI are part of an ambitious plan to increase the country's influence, particularly over global supply chains.
Like other oil-producing nations in the Persian Gulf, the Emirates is looking to diversify its economy away from fossil fuels, and it sees Africa as an essential part of the plan.
The continent has vast mineral resources, a growing population, agricultural potential and a strategically important location bordering the Red and Mediterranean seas as well as the Indian and Atlantic oceans.
Powerhouse Emirati corporations based in Dubai and Abu Dhabi with political connections are in dozens of countries across Africa.
AMEA Power is already building or operating clean energy plants in Burkina Faso, Djibouti, Egypt, Ethiopia, Ivory Coast, Kenya, Morocco, South Africa, Togo, Tunisia and Uganda and has plans to expand.
Abu Dhabi National Energy Co. has projects in Morocco, Senegal and South Africa and is participating in a project to invest US$10 billion in renewable energy in sub-Saharan Africa.
DP World, the gargantuan government-backed ports and logistics operator, has invested billions of dollars in ports and economic free zones from Algeria to Zambia, including in the Berbera port city in the breakaway republic of Somaliland, where the Emirates also has a military base.
Last summer, it announced that it would spend another US$3 billion on African ports over the next three to five years.
Last year, the Emirati International Holding Co. invested more than US$1 billion for a 51 per cent share in the Mopani Copper Mines in Zambia.
Spending in Egypt has also soared. Last year, the Emirates agreed to invest US$35 billion to develop a new city and tourism destination on Egypt's Mediterranean coast.
Emirati investment in Africa has ramped up as China's has tapered off. Once the biggest foreign investor on the continent through its Belt and Road Initiative, China still has a large presence, but Beijing has pulled back in recent years after a series of debt crises in Africa and economic problems at home.
In 2022 and 2023, the Emirates announced a total of US$97 billion in investments in Africa – three times China's total, according to fDi Markets, a database of foreign investments. US investment in 2023 was about US$10 billion.
Experts said that even though not all of these pledges would pan out, they showed an overall commitment to doing business on the continent.
The Emirates is also looking to build trade and has signed bilateral economic partnership pacts with three African nations, including Kenya, since the year's start.
'The UAE's total foreign assistance in Africa, which exceeded US$1 billion in 2023-24, also highlights our ongoing commitment to addressing urgent needs,' a government spokesperson on trade and aid said.
Meanwhile, Mr Trump has fast-tracked the United States' exit from Africa, ending billions of dollars in funding, dismantling the US Agency for International Development and ending all contributions to the African Development Bank.
The State Department's reorganisation plan also calls for the elimination of most operations in the region.
Britain has also tightened its flow of money into the continent in recent years as it has increased aid to Ukraine and increased its own military spending.
The Trump administration's actions are extreme, said Dr Ricardo Soares de Oliveira, a co-director of a program on African governance at Oxford University, but they reflect a larger global trend away from development aid and liberal values.
The world is transitioning to an era in which the focus on democracy and free markets is becoming less significant, Dr Soares de Oliveira said. 'A more business-focused approach is going to be the shared norm,' he added.
That is not to say the Emirates does not have substantial strategic and political interests in Africa.
What's different is that it has delegated statecraft to private interests and businesses, almost all of which have ties in some way to the government or ruling families, said Dr Andreas Krieg, a fellow at the Institute of Middle Eastern Studies at King's College London. These enterprises are expected to generate both economic and strategic returns.
'The UAE has revolutionized statecraft for a small country,' Dr Krieg said. It has fewer than 1 million citizens, is smaller than the state of Indiana and has a relatively tiny military. Yet, he said, 'it's very much playing the game of a middle power.'
Some of the Emirates' political choices have stirred concerns.
Sudan's government has accused the Emirates of fuelling genocide with its backing of the Rapid Support Forces, the paramilitary group engaged in a civil war that has killed 150,000 and displaced 14 million people.
Recently, Sudan's military cut diplomatic ties with the Emirates, which has said it has provided only humanitarian assistance.
The Emirates has also been accused of funneling money to the Russian mercenary group Wagner in both Sudan and Libya.
'There is no such thing as clean or dirty money in the UAE,' Dr Krieg said . NYTIMES
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