In 2022 and 2023, the United Arab Emirates has made investment pledges totalling about $97.3 billion to Africa, this is according to Bloomberg.
The country pledged $52.8 billion to Africa in 2022, while it pledged $44.5 billion in 2023.
With a recent $35 billion investment pledge made to Egypt, attention has been drawn to the level of interest the oil-rich gulf nation has displayed in the African continent. The move by the country is in line with its 2021 plan to deepen its trade ties with countries in Africa and Asia.
Speaking to Bloomberg News in 2021, Thani Al Zeyoudi, the Emirati Minister of State for Trade noted, “We’re going to open up the markets more aggressively with many countries.”
- Making reference to his country’s feud with Saudi Arabia, Al Zeyoudi noted, “Let the Saudis increase the competition, it means the pie is going to be bigger and having a bigger pie means that the UAE share out of this pie is going to be bigger.”
Since then, the UAE has outdone China, France, the UK, and the US in investment pledges to Africa. For China, $28.7 billion investment pledges were made to Africa in 2022 and 2023, while France made $31.9 billion investment pledges within the same period.
Details of some of the pledges
It is noted that the UAE companies have directed their attention predominantly towards the more developed economies within Africa, such as Egypt, Morocco, South Africa, and Kenya.
- During COP 28 last year, AMEA Power, the renewable energy company announced plans to spend $15 billion on green hydrogen production in Africa. The company also announced plans to spend $1 billion on renewable projects across Africa this year.
- In November 2023, International Holding Company, an Emirati conglomerate acquired a 51% stake in Zambia’s Mopani Copper Mines for a sum of $1.1 billion.
- During the Africa Climate Summit held in Nairobi, Kenya in September 2023, Sultan Ahmed Al-Jabber from Abu Dhabi announced that Masdar, the state-owned renewable energy company which he chaired would be leading a $4.5 billion climate financing for Africa. AMEA Power also pledged $1 billion in equity investments as part of the agreement.
What you should know
Monies pledged doesn’t equate to monies spent, however, there is optimism that in the next five years, UAE will be one of the largest sources of foreign direct investment into Africa.
- Speaking to Bloomberg, the CEO of Standard Bank Group Limited, Middle East and North Africa, Rassem Zok noted, “Two years ago it was spectacular growth, last year it was still comfortably in the double-digits, but the next two-to-three years we’ll see a return to growth in the thirties and above.”
In Nigeria, the United Arab Emirates (UAE) has solidified its position as a significant contributor to foreign investment. Over the span from Q4 2022 to Q3 2023, the UAE accounted for an influx of $375.01 million in foreign capital into Nigeria based on NBS data, marking it as one of the leading sources of external investment in the country during that period.
However, despite one of Nigeria’s important sources of foreign investment, Nigeria and the UAE have endured a torrid diplomatic relationship, stemming from the country’s visa ban on Nigerian citizens in October 2022.
