Gulf’s Outreach to Africa: The Geoeconomics and Geostrategy of the Deepening Ties

In recent decades, ties between Gulf nations – especially UAE and Saudi Arabia – and Africa have witnessed a significant improvement. Saudi Arabia’s King Salman Initiative for Africa which will be investing $1 billion across Africa over the next 10 years. In 2022 and 2023, the UAE made investment pledges of over $97 billion in Africa. Saudi Arabia has also acquired large tracts of land in the region. Africa would not like to depend solely on the US or China and get trapped in the geopolitical competition between Beijing and Washington. Further, Africa and the Gulf have a mutual interest in maritime security in the Gulf of Aden and the Red Sea

In recent years, Gulf countries have focused not just on resetting their economies and reducing dependence upon oil, but also on significantly reshaping their ties with the rest of the world. Gulf countries have become proactive not just on the issues of the Middle East but also on important global issues. In recent decades, ties between Gulf nations – especially UAE and Saudi Arabia – and Africa have witnessed a significant improvement.

Economic linkages between Gulf countries and Africa

Economic linkages between the Gulf nations and Africa have strengthened in several sectors, with Gulf countries showing interest in mining, energy and infrastructure. Gulf countries have also begun to focus on agri-business opportunities in Africa.

The two Gulf Cooperation Council (GCC) countries which have robust economic ties with Africa are Saudi Arabia and the United Arab Emirates – athough other Gulf countries, like Qatar, also have close economic linkages with Africa. Bilateral trade between Saudi Arabia and Africa was estimated at $45 billion in 2022. Between 2012-2022, UAE committed around $60 billion investment in Africa (in doing so it emerged as the fourth largest investor). In 2022 and 2023, the UAE made investment pledges of over $97 billion in Africa. UAE, which currently holds the Presidency of COP28, announced $4.5 billion in funding for clean energy projects across Africa at the African Climate Summit, Nairobi held in September 2023. What is also important is that the earlier investments were mostly in South Africa, but now the UAE has investments in several African countries. GCC countries, other than Saudi Arabia, have also signed and ratified bilateral investment treaties with Africa.

What is also important is that the earlier investments were mostly in South Africa, but now the UAE has investments in several African countries.

During the Saudi-Africa Summit held in Riyadh in November 2023, Saudi Crown Prince Mohammed Bin Salman (MBS) inaugurated the King Salman Initiative for Africa which will be investing $1 billion across Africa over the next 10 years. MBS also said that Saudi Arabia will invest $25 billion in Africa in several sectors. For 2022-2023, non-oil exports from Saudi Arabia to Africa were estimated at $34 billion. While speaking at the Saudi-African summit, MBS also said: “The Kingdom of Saudi Arabia and African countries are keen to enhance cooperation in a way that contributes to establishing security and peace in the region and the whole world,”

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UAE investment in Egypt

More recently, the UAE announced an investment of $35 billion in Egypt. The Abu Dhabi-based sovereign wealth fund ADQ announced plans to invest $35 billion in Egypt. The fund will acquire the development rights for Ras El-Hekma a coastal area —  212 km west of Alexandria, 350 km northwest of Cairo – for $24 billion. Another $11 billion will go toward additional investment projects throughout the country.

Egyptian Prime Minister, Mostafa Madbouly, while commenting on this commitment by ADQ said: “This deal will be the beginning of correcting the course of the Egyptian economy.”

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Factors bringing the two regions closer

If one were to look beyond the economic dimension of the relationship, it is important to realize, that there are important factors which are likely to give a push to the relationship.

First, the Gulf countries are keen to diversify economic ties with Africa and not restrict them to traditional areas. One example is the focus on agri-business, given the concerns regarding food security. The Gulf region’s sub-tropical, desert climate and low arable land have resulted in dependence upon food imports. Africa on the other hand has large tracts of uncultivated land.

In 2022, UAE ranked 23^rd in the Economist’s Food Security Index. In July 2023, Dubai Investments and E20 Investment, an Abu Dhabi-based agribusiness investment company, signed a deal in Angola for growing rice and avocados over a large plot of land.

Saudi Arabia has also acquired large tracts of land in the region and shown interest in agriculture in countries including – Ethiopia, Sudan and Zambia. Gulf countries are not just acquiring large tracts of land in Africa, but investing in areas like infrastructure, and irrigation and helping by way of knowledge transfers from the Gulf to Africa. While there have been some apprehensions regarding the acquisition of land by Gulf countries, countries like UAE and Saudi Arabia are trying to earn goodwill by focusing on humanitarian assistance and capacity building.

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Africa and the Gulf have a mutual interest in maritime security in the Gulf of Aden and the Red Sea and in the aftermath of attacks by Houthis on the Red Sea, this is even more important.

Second, there are important geopolitical factors at play. Africa would not like to depend solely on the US or China and get trapped in the geopolitical competition between Beijing and Washington. A clear reiteration of the fact that Gulf countries are attempting to provide an alternative to China and the US is the mining summit in South Africa – Mining Indaba — in February 2024. Not only were several companies from the Gulf present at the summit, but senior government officials from Gulf nations were also there.

Third, Africa and the Gulf have a mutual interest in maritime security in the Gulf of Aden and the Red Sea and in the aftermath of attacks by Houthis on the Red Sea, this is even more important.

Conclusion

In conclusion, the Gulf region’s increasing interest in Africa is important both from economic and strategic dimensions. The increasing economic engagement of Gulf nations with African nations will not just economically benefit the latter but also provide countries in Africa the alternatives beyond China and the US. Gulf countries will, of course, need to address the apprehensions that certain locals may have, especially on sensitive projects relating to natural resources or the acquisition of land.

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