By Seade Caesar
In recent years, the relationship between the Gulf Cooperation Council (GCC) states comprising the United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, Oman, and African nations has evolved into a robust partnership characterized by substantial investments and strategic collaborations.
This burgeoning alliance is often hailed as a “new heaven” for both regions, fostering economic growth, infrastructure development, and mutual prosperity.
A Surge in Foreign Direct Investment (FDI)
Over the past decade, GCC countries have collectively invested over $100 billion in Africa, marking a significant shift in the continent’s investment landscape.
The UAE has emerged as a leading investor, committing approximately $59.4 billion, while Saudi Arabia and Qatar have invested $25.6 billion and $7.2 billion, respectively.
Notably, in 2022 and 2023 alone, the UAE announced deals totalling $97 billion, underscoring its aggressive investment strategy in Africa.
Diverse Investment Sectors
The Gulf Cooperation Council (GCC) states have diversified their investments across Africa, targeting key sectors to foster economic growth and mutual benefits.
Renewable Energy
The United Arab Emirates (UAE) has emerged as a leading investor in Africa’s renewable energy sector, committing $72 billion between 2019 and 2023.
These investments aim to support the continent’s transition to sustainable energy sources, addressing both energy deficits and environmental concerns.
Projects span various countries, focusing on solar and wind energy developments, which are pivotal for reducing carbon emissions and promoting green energy adoption.
Infrastructure and Ports
GCC countries have strategically invested in Africa’s infrastructure, particularly in port development and transportation. The UAE’s DP World operates seaports in nations such as Angola, Djibouti, Egypt, Morocco, Mozambique, Senegal, and Somaliland, enhancing trade logistics and regional connectivity.
Additionally, Abu Dhabi Ports, in collaboration with Hutchison Port Holdings, is exploring projects to elevate the Port of Dar es Salaam in Tanzania as a world-leading trade hub. These investments are crucial for facilitating trade and supporting economic integration across the continent.
Agriculture and Food Security
In response to food security concerns, Saudi Arabia has invested heavily in Africa’s agribusiness, particularly in East Africa, with a portfolio covering approximately two million hectares.
These investments aim to secure a stable food supply for the Gulf states while contributing to agricultural development in Africa. The focus includes cultivating essential crops and developing infrastructure to support large-scale farming, benefiting both local economies and the broader food supply chain.
Telecommunications
The UAE’s Etisalat, now branded as (e&), operates across multiple African countries, including Egypt, Nigeria, and Ivory Coast, contributing to the continent’s digital infrastructure. Similarly, Qatar-based Ooredoo operates networks in Algeria and Tunisia.
These telecommunications investments are pivotal in enhancing connectivity, supporting digital economies, and providing millions with mobile and internet services, bridging the digital divide and fostering economic development.
Trade Relations and Economic Integration
Trade between the GCC and Africa has seen exponential growth. Over the last decade:
UAE’s Trade with Africa
The UAE has emerged as Africa’s biggest trading partner within the GCC, with total trade volume exceeding $60 billion annually. Key trade partners include Egypt, Kenya, and South Africa.
The UAE is a major re-export hub, with Dubai serving as a critical gateway for African goods, particularly in gold, minerals, and agricultural products.
Kenyan exports to the UAE, for instance, reached $430 million in 2023, while Egypt has strengthened its trade ties, exporting petroleum, textiles, and food products to the UAE, further enhancing economic relations.
Saudi Arabia’s Trade with Africa
Saudi Arabia’s trade with Africa has grown 12-fold in the past decade, with total trade volume surpassing $40 billion. Egypt is a primary trading partner, with Saudi investments in infrastructure and energy projects exceeding $10 billion.
In West Africa, Saudi Arabia has boosted trade with Senegal and Nigeria, particularly in oil exports, construction materials, and food products. The expansion of trade agreements between Riyadh and African nations has also facilitated the export of agricultural goods and strengthened bilateral economic cooperation.
Qatar’s Role in Economic Integration
Qatar has strengthened its trade and economic partnerships with several African nations, focusing on energy, finance, and infrastructure. With trade investments exceeding $15 billion, Qatar has deepened ties with Sudan, where it has heavily invested in mining and agriculture.
In addition, Qatar’s investment in South Africa’s banking sector, including strategic partnerships with financial institutions, has facilitated trade financing and economic expansion. Furthermore, Qatari companies have participated in infrastructure projects in Ethiopia and Tanzania, contributing to regional development and economic stability.
The African Continental Free Trade Area (AfCFTA) and GCC Opportunities
The implementation of the African Continental Free Trade Area (AfCFTA) in 2021 has created a single market for 1.7 billion people, projected to reach $6.7 trillion in business spending by 2030. This has opened vast opportunities for GCC investors to access unified African markets with reduced trade barriers.
The UAE and Saudi Arabia have positioned themselves as key players in Africa’s logistics and manufacturing sectors, leveraging AfCFTA’s framework to facilitate smooth trade and investment expansion. This economic integration is expected to boost intra-regional trade and enhance Africa-GCC partnerships in the coming years.
Strategic Collaborations and Future Prospects
The Gulf states are not just investing but also fostering strategic collaborations. In October 2024, Saudi Crown Prince Mohammed bin Salman visited Cairo to discuss investment opportunities with Egyptian President Abdel Fattah al-Sisi, signalling a shift from direct financial aid to sustainable investments.
Moreover, ACWA Power has signed deals worth over $1.78 billion in North Africa, focusing on renewable energy and battery storage projects.
The diagram highlights the future FDI commitments of UAE, Saudi Arabia, and Qatar in Africa, focusing on renewable energy, mining, infrastructure, energy, real estate, and finance.
The UAE leads in investment, committing $72B to renewable energy and $38B to mining. Saudi Arabia prioritizes mining ($25B) and industrial projects ($5B), aligning with its Vision 2030.
Qatar focuses on energy ($15B), real estate ($10B), and finance ($8B). The GCC’s investments indicate a strategic shift from oil dependency to Africa’s economic sectors, strengthening their influence in the continent’s energy, infrastructure, and financial markets for long-term partnerships.
Why This Relationship is the “New Heaven”
The Gulf-Africa relationship is proving to be a win-win situation for both regions.
Economic Growth and Development
The large-scale investments by the Gulf States are fuelling economic growth across Africa. Infrastructure projects are improving connectivity, reducing logistics costs, and creating job opportunities. Industrial parks and special economic zones funded by GCC investors are boosting manufacturing and export capacities, leading to sustainable development.
Diversification of Gulf Economies
The Gulf States are actively seeking to diversify their economies beyond oil dependence. Africa’s untapped markets provide an opportunity for the Gulf to expand in sectors like agribusiness, logistics, and digital services. This diversification helps stabilize the GCC economies and reduce reliance on traditional revenue sources.
Strengthening Trade and Investment Networks
Enhanced trade agreements between the GCC and African nations create a streamlined investment climate. The Gulf’s financial institutions and sovereign wealth funds are injecting capital into African start-ups, fintech ventures, and emerging industries, fostering innovation and long-term economic resilience.
Geopolitical and Strategic Influence
By establishing deeper economic ties with Africa, the Gulf States are strengthening their geopolitical influence. This relationship allows the GCC countries to secure essential resources, ensure food security, and counterbalance the influence of other global players like China and the European Union in Africa.
Human Capital and Knowledge Transfer
GCC investments in African universities, research centers, and vocational training programs contribute to human capital development. Initiatives focusing on education, technology transfer, and skill enhancement are equipping African youth with the expertise needed to participate in a rapidly evolving global economy.
Conclusion
The evolving ties between the Gulf States and Africa highlight a promising era of cooperation, investment, and growth. With billions flowing into diverse sectors and economic integration deepening, this partnership is reshaping Africa’s development trajectory while securing vital interests for the Gulf states. As trade and investment continue to flourish, the Gulf-Africa relationship will remain one of the most influential economic alliances of the 21st century.
The writer is the Executive Director
Africa Global Policy and Advisory Institute
