Agriculture, renewable energy, healthcare and critical minerals have become key sectors attracting significant investments from Gulf monarchies. The six members of the Gulf Cooperation Council (GCC) – Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Kuwait, Oman and Qatar – have shown a marked increase in interest in African markets.

According to a new report by the African Export-Import Bank (Afreximbank), GCC investments exceeded $121bn from 2012 to 2022.

The UAE leads the pack, with $54.9bn invested during the period, followed by Saudi Arabia with $25.6bn and Qatar with $7.2bn. “In diversifying their economies beyond oil and gas, GCC states have strategically integrated African markets into their economic models,” Afreximbank noted.

Egypt, the main recipient

“The partnership between the GCC and African countries offers significant opportunities, including increased investment, improved agriculture, job creation and infrastructure development, enhancing African economic resilience,” says Afreximbank.

The GCC saw strong collaboration across various sectors with its main trading partners: Egypt, South Africa, Nigeria, Kenya, Morocco, Sudan and Eritrea.

“This evolving relationship indicates the strategic economic alliances forged in the context of global trade patterns,” it said.

Egypt, the largest recipient with $11bn in foreign direct investment (FDI) from the Gulf in 2022, is especially attractive to foreign investors for its energy opportunities, particularly in hydrocarbons and renewables.

Since 2021, Qatar has expanded its investments in the energy sector in Zambia and South Africa. It acquired a 50% stake in an 800MW renewable energy project in South Africa and invested $200m in Airtel Mobile Commerce, the mobile money division of Airtel Africa.

Masdar, Abu Dhabi’s state-owned clean energy company, has emerged as a leader in renewable energy initiatives across Africa.

In December 2022, it signed a critical concession agreement with Angola’s Ministry of Energy and Water to develop a 150MW solar energy project to power approximately 90,000 homes. Other Masdar projects include five wind farms in South Africa, a battery storage system in Senegal and solar installations in Mauritania.

The battle for mines intensifies

The race for investments sometimes becomes a power struggle between Gulf states, particularly in the area of critical minerals between Qatar and Saudi Arabia.

In 2022, Riyadh invested 27% of its FDI in Africa’s mining sector, primarily focused on Zambian copper. Created in 2023, the Manara Minerals investment fund is the result of the “Vision 2030” strategy led by Crown Prince Mohammed bin Salman, which aims, among other things, to make the kingdom a mining powerhouse.

In Zambia, Manara Minerals plans to buy 15% to 20% of the assets of First Quantum Minerals, a copper mine.

In the same sector, Qatar is ahead of its neighbour. The small state bought the Mopani mine, formerly a Glencore jewel, in early 2024 and partnered with Jubilee Metals to process 260 million tonnes of copper.

In addition to these mining ambitions, Qatar is also making its mark in aviation. Qatar Airways, the world’s best airline in 2024, according to Skytrax, is forging partnerships with African aircraft operators. The most recent example is its 25% stake in Airlink.

By investing in southern Africa’s largest independent regional carrier, which serves 45 destinations in 15 African countries, Qatar Airways aims to consolidate its codeshare partnership with the airline.

Developing agriculture

Beyond energy, mining and aviation, Gulf countries are investing in agriculture to secure their food supply. Saudi Arabia has injected more than $1.2bn into agricultural projects in Egypt, particularly to boost wheat production.

“This initiative is crucial for Egypt as it seeks to reduce its reliance on imported wheat amid fluctuating global grain prices,” says Afreximbank.

Like its neighbours, Saudi Arabia has not hesitated in leasing land to develop agricultural initiatives. In 2023, Riyadh collaborated with Sudan to explore crop production and livestock projects, aiming to maximise the use of the country’s fertile land and turn it into a reliable food source.

Oman and Qatar are also focusing on agricultural partnerships in East Africa. Kenya, for example, has signed a development agreement for agricultural projects with Qatar. The goal is to increase food production in both countries.

Bahrain has taken a different approach. The country focuses its investments on real estate and finance in Morocco and Tunisia. While the UAE imports 54% of its agricultural needs from Africa, Bahrain only imports 3%.

Islamic banking

Al Baraka Group’s presence in North Africa is a sign of its involvement in the banking sector. The Bahrain-based institution offers a full range of Islamic banking services, facilitating the spread of Sharia-compliant financial instruments in these regions. Over the years, Al Baraka has established a notable presence on the continent through its various operations in Egypt, Tunisia, Sudan, South Africa, Algeria and Libya.

Afreximbank expects economic relations between Africa and the GCC to continue to expand, supported by the strong ties between the two regions.

“With over four million Africans undertaking pilgrimages to Saudi Arabia and many Arabian-speaking African countries, these cultural and linguistic bonds further strengthen the relationship, driving shared development and prosperity,” the bank said.