The United Arab Emirates (UAE ), has raised the states as it joins the competition for lucrative African market.
In the growing scramble by global superpowers to gain commercial influence in Africa, the UAE is targeting a share of the continent’s 1.2 billion people market for its goods, according to a report by The EastAfrican.
It quoted the latest report by property consultant firm Knight Frank which shows the UAE is the biggest source of FDI for Africa among the Gulf Cooperation Council (GCC) states and remains focused on the continent’s high-growth sectors such as infrastructure, energy, transport, logistics, and technology.
Over the past decade, the UAE has emerged as the fourth-largest investor globally into Africa — after China, Europe and the US, according to the White&Case, a global, New York-based law firm that serves companies, governments and financial institutions.
Abu Dhabi’s rise means more competition in Africa’s market with the US, India, Russia and China, who have enjoyed influence on the continent.
Beijing has, for the past two decades, pumped billions of dollars into Africa, building roads, bridges, and power installations in return for access to markets and resources. It has an estimated portfolio of $154 billion worth of infrastructure projects.
Key sectors
According to White&Case, FDI flows from the GCC (Bahrain, Kuwait, Oman, Saudi Arabia and UAE) states to Africa between 2012 and 2022 stood at $101.9 billion on 628 projects while that from Africa to GCC states stood at $3 billion on 141 projects.
FDI flows to Africa from the UAE stood at $59.4 billion in the period followed by Saudi Arabia ($25.6 billion), Qatar ($7.2 billion), Kuwait ($5 billion) and Bahrain ($4.2 billion).
“Saudi Arabia has equally made significant investments in energy and mining projects in Africa,” noted the Knight Frank report titled Africa Horizons: The Continent’s unique guide to real estate investment trends and opportunities (2023/2024).
It is now emerging that Africa is fast becoming one of the most important markets for Abu Dhabi, which invested $5.6 billion in 71 projects in the continent in 2021, with the most significant being The Agtech Park in Egypt.
The top five destination countries for FDI inflows from GCC to Africa between 2012-2022 are Egypt ($69.8 billion), Morocco ($4.6 billion), Algeria ($3 billion), Nigeria ($2.6 billion) and South Africa ($2.3 billion). The top five sectors of FDI inflows include construction ($36.2 billion), environmental technology ($31.7 billion), energy ($10.1 billion), transport and warehousing ($6.6 billion) and agribusiness ($3.2 billion).
Investors are also looking at other sectors such as sea ports, telecommunications, airlines and airports. Dubai’s DP World, a major player in global supply chain solutions, has invested over $1.8 billion in Africa over the last 10 years, and plans to invest a further $3 billion over the coming years.
India is also making attempts to exert commercial influence on the continent. For instance, in 2022 India hosted a two-day investment meeting in New Delhi featuring more than 40 African officials from 17 countries to discuss how India and African nations can further facilitate trade and investment.
Its new Road Transport Centre for delivery trucks in Kigali, Rwanda has reduced waiting times for land transport from weeks to days.
The project has also lowered storage costs, helping to position Kigali as a significant logistics hub in East Africa and facilitating connections between regional businesses and global markets.
DP World operates seaports in Angola, Djibouti, Egypt, Morocco, Mozambique, Senegal and Somaliland.
China’s trade with the Continent increased 35 percent to $254 billion in 2021 mainly due to an increase in Chinese exports, according to the IISD.
India, which is now one of the top five investors in Africa, with about $ 74 billion of investments, is among the many countries wary about Beijing’s growing influence on the continent.
Russia, on its part used the second Russia-Africa Summit (July 27-28) in St Petersburg as a platform to rekindle its relations with Africa.
The United States is also stepping up efforts to rebuild its influence in the continent after losing ground to its rivals.
On March 26 this year US Vice President Kamala Harris arrived in Ghana to kick off a week-long visit to three African countries (Ghana, Tanzania and Zambia).
The visit followed the progress which had been achieved at the second US-African leaders’ summit in December 2022.
The summit was the first tangible outcome of Joe Biden administration’s newly announced US Strategy toward Sub-Saharan Africa which seeks to reposition the US as Africa’s valuable partner.
The summit brought together about 49 African heads of states and resulted in several major commitments from the US including $55 billion pledge to support the African Union (AU)’s agenda 2063.
Harris’ visit to Africa followed visits by Treasury Secretary Janet Yellen and Secretary of State Antony Blinken.
The EastAfrican
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