The United Arab Emirates (UAE) has become the largest investor in new business projects in Africa, committing $110 billion to various ventures between 2019 and 2023.
According to Middle East Monitor, this includes $72 billion for renewable energy, surpassing investments by the UK, France, and China.
The Guardian, citing FT Locations, (a provider of investment promotion and economic development data and digital solutions for the foreign and domestic direct investment industry), UAE companies have pledged $110 billion in projects across Africa, outpacing traditional investors such as the UK, France, and China.
Much of the investment has focused on renewable energy, with $72 billion directed towards green energy projects. African leaders have welcomed this increased investment, especially for energy and infrastructure.
Ahmed Aboudouh, associate fellow at Chatham House, stated,
“African countries are in dire need of this money [for] their own energy transitions.”
However, he also noted that UAE investors often pay less attention to labour rights and environmental standards.
Major UAE companies expand in Africa
Several large Emirati companies are central to the UAE’s investment strategy in Africa. Dubai’s DP World operates six African ports, and Abu Dhabi Ports has expanded in countries including Guinea, Egypt, and Angola.
In Zambia, International Resource Holdings, a company linked to Sheikh Tahnoon bin Zayed, secured a $1.1 billion deal for a 51 percent stake in Mopani Copper Mines. These investments reflect the UAE’s efforts to diversify from oil and gas and increase its presence in African infrastructure.
Challenges and concerns over investment projects
Reports inform that not all of the UAE’s investments in Africa have proceeded smoothly. In Zambia, financial troubles at the state-owned ZESCO have delayed solar projects.
In addition, there have been concerns about the transparency of some UAE-backed ventures. According to Middle East Monitor, a report from Swissaid revealed that $115.3 billion in unaccounted gold exports to Dubai occurred between 2012 and 2022, raising questions about the legality and transparency of the trade.
A professor at Georgetown University, Ken Opalo, warned about the risks of increased foreign attention on Africa, saying,
“There is also the opportunity for the attention to breed criminality—like we are seeing in the gold sector.”
UAE’s economic role in Africa
Reports inform that the UAE’s ministry of economy recently confirmed that the UAE is the fourth-largest global investor in Africa, with a total investment of $60 billion.
The ministry also noted that more than 21,000 African companies operate in the UAE, reinforcing the strong economic ties between the two regions.
While the UAE’s financial involvement offers significant benefits for Africa, it also presents challenges that must be addressed as these partnerships continue to grow.
