Historically, the Arabian Peninsula was a major marine center linking East African trade routes to the Middle East. With greater economic ties throughout Africa key to their aspirations, three Gulf Cooperation Council (GCC) members — Qatar, Saudi Arabia, and the United Arab Emirates (UAE) — are now establishing themselves as powerful middle powers.

Expanding their presence in the resource sectors of oil, gas, mining, and agriculture, the Gulf businesses and institutions are also heavily engaged in transportation infrastructure, logistics, and renewable energy. Still, Africa-Gulf relations show the difficulty of juggling possibilities and hazards in the developing multipolar age.

The UAE has emerged as one of the largest investors in Africa, with $100 billion in commitments.

Traditionally, the most solid ties between the GCC and Africa have been with North Africa, with a clear focus on Egypt. The Gulf States have long seen North Africa and the Horn of Africa as “extended neighborhoods”. Nevertheless, until recently the linkages between the GCC nations and these two regions were not especially strong despite the geographical closeness, common history, migration and commercial connections.

But the Gulf Arab participation in North Africa as well as the Horn of Africa and the Red Sea Rim has grown during the last 20 years. Nowadays, Saudi Arabia, the UAE and Qatar are aggressively looking for economic possibilities and trying to establish their impact across the whole continent. To serve their business interests, they have expanded the number of their embassies across Sub-Saharan Africa (SSA).

Trade between Africa and the Gulf nations has shown a consistent increase recently. Reaching a record $154 billion in 2022, the Economist Intelligence Unit noted a notable rise in bilateral trade, thereby reducing the gap with China and Western Europe and positioning the GCC well ahead of the US and India. Although mining goods are a major import, commerce in other areas is growing, while oil and gas dominate GCC exports to Africa. Offering access to a bigger united African market, the Africa Continental Free Trade Area (AfCFTA) is projected to strengthen these links even further.

Except for Saudi Arabia, all the GCC governments have signed bilateral investment treaties (BIT) with African counterparts. Driven by ambitious promises to generate renewable energy like green hydrogen and build infrastructure like ports, warehouses, and data centers, the Gulf investors in Africa have lately made announcements of greenfield foreign direct investment (FDI). Last year, GCC firms revealed 73 FDI projects in Africa valued over $53 billion, claims fDi Markets. With $60 billion spread over 83 projects, 2022 was the only year with more FDI capital expenditure from the GCC investors.

About 85% of the more than $100 billion the GCC nations have poured into the continent comes from the UAE and Saudi Arabia. With promises significantly higher than those of China whose infrastructure financing has dropped, as well as France, the UK, and the US, the UAE has indeed become one of the biggest investors in Africa. Having 26,500 Africa-registered businesses, Dubai has also developed as a commercial center for Africa.

Gulf states are heavily funding copper, nickel, and other vital minerals critical for renewable energy technologies.

Investments from the Gulf States in Africa are mostly focused on three areas — natural resources (hydrocarbons, mining, and agriculture), port infrastructure and transport hubs, and renewable energy and technologies.

Using their project funding and experience, oil and gas giants Saudi Arabia, the UAE, and Qatar are increasing their presence throughout the whole energy value chain. Targeting oil sustainability with Chad, Ethiopia, Nigeria, Rwanda, and Senegal, Saudi Minister of Energy Prince Abdulaziz bin Salman inked agreements last November at the Saudi Arabia-African Economic Conference. Meanwhile, Saudi Aramco intends to make investments in the revival of four state refineries in Nigeria, which have been non-operable for years, therefore necessitating reliance on imports for gasoline.

Last December, the UAE committed to provide both technical and financial support for building an offshore gas pipeline that would carry Nigerian gas to Morocco, which has become a significant target for Emirati investments drawing a combined $30 billion.

April saw reports of “intensified” discussions with Alpha MBM Investments, located in Dubai, positioned as the main developer and investor in the planned $4 billion refinery in Uganda. Complementing the company’s efforts to increase its lower-carbon LNG portfolio, Abu Dhabi National Oil Company (ADNOC) said the following month that it had bought Galp’s 10% equity share in Mozambique’s Rovuma LNG project.

Targeting high-potential areas for increased refined product sales, the UAE’s state-owned oil and gas giants such ADNOC and the Emirates National Oil Company Group (ENOC) are also expanding their storage and distribution networks throughout Africa.

GCC nations are increasingly focused on food security by investing in African agriculture and controlling the entire food supply chain.

ENOC and Tanzania’s Ministry of Energy signed a Memorandum of Understanding (MoU) in January 2023, aiming at building a receiving and storage facility for gas and oil products. Two months later, ADNOC, Aramco, and ENOC inked contracts, agreeing to provide Kenya with petroleum products. Among many businesses reportedly assessing offers for Shell’s downstream assets in South Africa are ADNOC and Aramco.

Focusing on gas resource acquisition, Qatar Gas has partnered with Jeniks Energy Group to manage investment in the gas industry across Africa. As part of their joint venture ambitions to develop the Orange basin region in surrounding Namibia, QatarEnergy and TotalEnergies said in May they would purchase participation interests in offshore oil and gas blocks in South Africa. More recently, Qatar Energy signed a contract with Exxon Mobil to acquire a forty percent participation in two ultra-deep water exploration zones off the coast of Egypt.

Particularly in the mining sector — including its vital minerals sector — the Gulf nations are digging into Africa. They are heavily funding copper, nickel, and other minerals required for power transmission lines, electric vehicles (EVs), and renewable energy among the worldwide push for sustainable energy solutions and China’s supremacy in mineral processing.

Though the specifics are unknown, the UAE and the Democratic Republic of Congo’s (DRC) state-owned Sakima mining firm inked a $1.9 billion agreement in July 2023 to develop four vital mineral mines. With a $1.1 billion acquisition of a 51% share in Zambia’s Mopani Copper Mines in December 2023, International Resources Holding (IRH), the mining investment arm of Abu Dhabi’s International Holding Company (IHC), In Zambia, IRH teamed with Jubilee Metals Group in a copper recovery and processing project.

Rising as a major participant in the African mining sector is Saudi Arabia which wants to become a processing center for battery materials and boost economic contribution from $17 billion to $75 billion by 2035. Four African nations have agreements with the Kingdom for investigating mining prospects. With a network of activities in Malawi, Mozambique, Zimbabwe, and Zambia, Saudi Arabia’s Ma’aden — mostly controlled by the Public Investment Fund (PIF) and the biggest multi-committee mining and metals corporation in the Middle East — has grown into prominence in Africa.

Saudi Arabia and UAE are leading the charge in building port infrastructure and transportation hubs across Africa.

For the GCC nations who have focused on agro-investments in Africa, food security is an absolute top concern. They have always handled their food supply concerns very well. But the 2007–2008 food crisis — characterized by food export restrictions in more than thirty nations — inspired initiatives to guarantee a consistent supply. The Gulf States’ concerns about food security have been reignited by the COVID-19 epidemic and the disturbance in global supply systems related to the Ukraine war.

Following their food security policies, Saudi Arabia and UAE have led the way in investing in African agriculture for more than 10 years via contract farming, acquisition of agricultural businesses, and lease or purchase of substantial areas of land. Land purchases have sped up in the last several years. Agricultural land in Sudan, Zimbabwe, and Angola has been acquired by Emirati corporations such Dubai Investments and the Abu Dhabi-based E20 Investments.

Most of the 14 pending land purchase agreements the UAE has are in Africa. From crop cultivation to processing and export of the finished good and sales, the UAE and Saudi Arabia are now developing nations with complete control of the food supply chain.

With an eye on creating significant financial returns and supporting food resilience, the Gulf firms are creating food and agricultural portfolios. Al Dahra Agricultural Company runs four large agricultural projects in Egypt, mostly supplying the local market with wheat and other food crops. And 50% of its shares are owned by Abu Dhabi’s sovereign wealth fund ADQ.

The UAE’s Elite Agro Projects revealed last October its intentions to open a tea plant in Uganda and a wheat farm in Ethiopia. Targeting a number of important areas, including food production, ADQ established a financing and investment structure with Kenya last April.

Just like the UAE, the respective approaches adopted by Saudi Arabia and Qatar for food security center on raising local production while making investments in worldwide supply networks to get preferential access to key commodities. Recently, many Saudi teams visited South Africa and Nigeria as well as other East African nations to look into agricultural business prospects. Hence, agribusiness transactions have been explored by companies such Gulf Saudi Star Agricultural Development and Qatar’s Hassad Food in Ethiopia, Uganda, and elsewhere.

Gulf nations are expanding their involvement in Africa’s renewable energy sector, including green hydrogen and sustainable fuels.

UAE’s ambitions go beyond just growing its own food to include becoming a food trading center. Therefore, thanks to a network of ports and logistical hubs, the many Emirati businesses in the food and agricultural sectors in Africa are progressively linked to the UAE.

A pillar approach for GCC governments has been investing in port infrastructure, controlling important transport hubs, and either supporting or investing in African transport and logistics enterprises. The UAE has several African ports and is leading in establishing deeper links with the African transportation industry. Over $1.8 billion has been invested by DP World, a logistics business located in Dubai, to Africa over the previous 10 years. Going forward, it intends to contribute another $3 billion.

Currently, DP World ranks among the biggest port operators in Africa. Its ports on the sea and inland transport terminals as well as other activities are spread throughout the continent. And for $890 million, it bought Imperial Logistics, the largest distributor in South Africa in March 2022. To run the diverse Dar es Salaam Port, DP World signed a 30-year concession contract with the Tanzanian government in October.

It has also launched a $80 million logistics park, which would relate to its current cargo terminal in Ain Sokhna Port in Egypt. The business revealed in June intentions to spend $3 billion to build new port and logistical hubs throughout Africa.

Abu Dhabi has increased its own expenditure in African port development during the previous several years. An example of this are the concession agreements and collaboration accords with Sudan and Tanzania (2022), Angola, Republic of Congo-Brzzaville, Egypt (2023), which Abu Dhabi Ports Group has inked.

Targeting to improve the Kingdom’s product and export flow via Africa’s gateway, the Federation of Saudi Chambers inked a 92-year deal with Djibouti Ports and Free Zones Authority in June to construct a logistics free zone at the Port of Djibouti. Focusing on many industries in more than a dozen African nations, investment financing from the Saudi Fund for Development (SFD) has gone up. Recently, it teamed with Africa Finance Corporation (AFC) to find and jointly execute infrastructure projects all throughout the continent.

With an eye on renewable energy, hydrogen, and sustainable fuels, the Gulf States are expanding the range of their involvement in Africa’s energy industry. For cooperation in producing green hydrogen and its derivatives, Riyadh-based ACWA Power inked a MoU with Industrial production Corporation (IDC) of South Africa in late 2022.

Masdar, a state-owned renewable energy business from Abu Dhabi, bought a share in South Africa’s Lekela Power that year and is now working with Germany’s Conjuncta and Egypt’s Infinity on the west coast of Mauritania. With its headquarters in Dubai, URB, a development company, is spending $20 billion on building the most sustainable metropolis on the continent — called “The Parks” — in South Africa.

While Gulf investments in Africa present opportunities, they also raise concerns about political unrest and exploitation.

The UAE promised $4.5 billion at the Africa Climate Summit last year to hasten initiatives including sustainable energy. With backing from AMEA Power, Abu Dhabi Fund for Development, and Etihad Credit to close the financing gap, Masdar in association with Africa50 seeks to scale up renewable energy projects. Operating in more than a dozen African nations, Dubai-based AMEA Power LLC intends to commit $1 billion on renewable projects, including building a green hydrogen factory in Kenya. Concurrently, TAQA Morocco, under ownership of Abu Dhabi National Energy Company, intends to invest $1.6 billion in renewable energy projects.

Meanwhile, Saudi Arabia’s ACWA Power is the biggest GCC-based investor in the renewable energy industry of South Africa and the leading stakeholder in the Redstone concentrated solar power (CSP) facility.  Entering a joint venture with Enel Green Power SA, Qatar Investment Authority (QIA) also engaged in clean energy production in South Africa.

Driven by common goals of economic diversification, investment, and sustainable development, economic links between the Gulf States and Africa are blossoming. That stated, the Africa-Gulf relations mirror the conflict between the possibilities and hazards present in the contemporary multipolar period.

Investing in Africa gives the GCC countries access to geopolitical power, fresh markets, and natural resources. These investments also boost their attempts at economic diversification and food security. The disadvantages, however, include possible local community reaction and political unrest.

Gulf investments and alliances are timely and highly needed for African nations.

Among the drawbacks, it is difficult to overlook the Gulf States’ support to the authoritarian governments and militias; extensive smuggling networks allowing illegal financial flows; Dubai providing refuge to many African oligarchs; and possible exploitation of local communities and surroundings by means of investments in mineral and food resources.

Still, the African leaders can shape results, while the GCC countries and businesses have names to maintain. Both sides may guarantee mutually beneficial economic relations by supporting open trade practices, investing in sustainable initiatives, enhancing regulatory frameworks to stop exploitation, and thus forging alliances that make local economic development a top priority.