From investment pledges to bilateral ties, exploring UAE’s deepening interest in Africa

The UAE has made significant investment pledges in Africa in recent years. Totalling about $97.3 billion, the Gulf state pledged $52.8 billion to the burgeoning continent in 2022 and $44.5 billion last year, according to Bloomberg.

Since a recent $35 billion pledge made to Egypt, attention has been drawn to the deepening level of interest the Emirates has displayed in Africa. Nonetheless, the move supports the nation’s 2021 plan to improve its trade relations in both Africa and Asia.

In 2021, UAE’s Minister State for Trade, Thani Al Zeyoudi, highlighted the GCC state’s decision to start opening up the markets more aggressively with many countries. Since then, the Emirates has outdone China, France, the UK and the US in terms of investment pledges.

Notable instances of UAE investments in Africa

In 2022 and 2023, China made $28.7 billion investment pledges to Africa and France made $31.9 billion. It should be emphasised here that the UAE companies have been focusing predominantly on more developed economies such as Egypt, Morocco and Kenya.

There are some notable instances, including renewable energy company AMEA Power recently announcing plans to spend $15 billion on green hydrogen production in Africa and $1 billion on clean energy projects across the continent.

The UAE’s deepening interest in clean power and climate action is prominent across the globe. The Gulf state hosted the COP28 Summit last year at Expo City Dubai, convening participants from hundreds of countries for an elaborate decision-making process.

On the first day of the climate conference, participants agreed to operationalise the Loss and Damage Fund to compensate vulnerable countries for consequences of climate change. In the end, they also acknowledged the need to transition away from fossil fuels.

UAE’s growing investment in Africa brings optimism

In another instance, last November, Emirati conglomerate International Holding Company acquired majority stake in Zambia’s prominent Mopani Copper Mines for $1.1 billion. UAE’s clean energy champion Masdar has also been playing a crucial role in the region.

There is significant optimism that in the next five years, UAE will be one of the largest sources of foreign direct investment into Africa. The massive continent’s potential largely remains untapped, making it a great option for firms looking to invest in promising projects.

In recent years, the Gulf state has also bolstered its position as a major contributor to foreign investment in Nigeria. From Q4 2022 to Q3 2023, it represented an influx of $375.01 million in foreign capital into Nigeria, as per NBS data.