Foreign Direct Investment (FDI) from the Gulf to Africa has soared. The UAE is leading the charge, with deals spanning green hydrogen, transport, logistics, and real estate. Geographically, UAE financial flows have spread from its base on East Africa’s coast into Nigeria, South Africa, and Angola.

With an estimated 111 billion barrels of proven crude oil reserves, the UAE is dripping in black gold. As the price of crude has increased since the start of the global pandemic – rising from around $22 a barrel in April 2020 to nearly $80 in May 2024 – the additional revenue from oil sales has been used to fuel Emirates’ investment strategy across the globe.

In February this year, the UAE announced a $35bn investment in Egypt, effectively bringing the country back from the brink of economic collapse as debt levels peaked. In return, the UAE secured development rights of the Ras Al-Hikma peninsula on Egypt’s Mediterranean coast, strengthening the UAE’s maritime strategy in the Red Sea with Dubai Ports World, which is ubiquitous along Africa’s East coast. 

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DP World has a presence in the DRC, Angola, Tanzania, Somaliland, Egypt, Senegal, and Mozambique, which has “bought them a lot of influence on the continent”, says a security expert based in Nairobi. This influence could play out in Sudan, where the UAE is fighting a proxy war with Saudi Arabia.

With louder calls for the Security Council to take a position on the current war in Sudan, the UAE could end up with procedural influence over what gets tabled concerning African affairs through DP World’s presence in Mozambique: Mozambique is part of the A3+, a mechanism in place to project Africa’s influence on decision making, on the council.

“Africa is the ideal sandbox to test out the UAE’s evolving economic strategy and realise its geopolitical goals,” says the Nairobi-based expert.

 

 

Sphere of influence

The UAE, on the other hand, provides a potential framework for Africa’s own economic and political ambitions. Firstly, the UAE is emerging as a serious alternative to the conditional finance that usually accompanies support from the global north as well as funding from China – the latter spearheaded infrastructure development across the continent only to set many African countries on a path of severe debt distress.

Secondly, the Emiratis also presents itself as an alternative, authoritarian model of development – one that relies heavily on hydrocarbons, while largely avoiding scrutiny at the international and diplomatic levels.

“There was an expectation that the US would kick up a fuss over the UAE’s support of the Rapid Support Forces (RSF) in Sudan,” says the security analyst. “But they haven’t done anything. Essentially, if you make yourself useful in the right way, like by selling oil to the global north for instance, it buys you diplomatic cover. Well, that seems to be the case for the UAE at least.”

They continue: “The UAE is essentially the number one route for Russian sanctions evasion, but again, the US has done little to counter this.”

As the call to move towards net zero intensifies, African leaders have been gradually calling out the hypocrisy between developed nations’ words, actions, and inaction.

Russia’s invasion of Ukraine in February 2022 essentially severed supply chains, forcing Europe to find alternative sources of oil and gas from Africa, despite pledges and promises to stop fuelling oil exploration and extraction, which would arguably limit Africa’s industrial revolution.

New characters, same conditions?

As Africa becomes increasingly disillusioned by the West, the UAE has emerged as a willing partner. In January this year, the Ugandan government began negotiations with UAE-based Alpha MBM Investments for the development of an oil refinery after talks with a Western-led consortium fell through.

Meanwhile, Uganda was excluded from preferential trade agreements with the US through the African Growth and Opportunity Act after it passed an anti-LGBT+ law, which includes the death penalty as punishment.

In a race to secure minerals for the energy transition, the UAE pledged $4.5bn to fuel Africa’s green ambitions at COP28 last year. In November 2023, International Holding Company (IHC), controlled by the brother of UAE President Sheikh Mohammed bin Zayed, paid $1.1bn for a 51% stake in Zambia’s Mopani Copper Mines. The same company now hopes to buy an 80% stake in the country’s 80% Lubambe copper mine, hoping to elbow China out of the deal.

“The goal is to become a global hub for mineral processing,” says Torbjorn Soltvedt, associate director at Maplecroft. “These acquisitions will help them jumpstart that whole supply chain.”

UAE interest in Africa shows that Emirati support also comes with significant strings attached, illustrated by the recent Egypt deal and others. At the end of April, Bloomberg revealed that the Hamad Bin Khalifa Department of Projects, which has links to the Abu Dhabi royal family, agreed to lend $13bn to South Sudan in exchange for oil, marking one of the largest oil-for-cash deals in Africa.

“The UAE is increasingly beginning to reflect Western conditionality and the resources-for-cash deals that characterise Chinese involvement in the continent,” says a Horn of Africa specialist based in Somaliland.

“But at the same time, if Africa finds itself struggling to meet the terms of UAE investment, it is never going to be able to write off debts in the way that the Paris Club can. The UAE doesn’t have the same clout.”

The UAE is stealthily gaining ground in Africa, and the continent is using the region’s interest as a counterpoint to the global north, a tool to take charge of its own natural resources and fate, in line with its growing independence and standing on the international stage. But the balance is already tipping in favour of the UAE.