The monarchy hosted a Saudi-Arab-African economic conference in Riyadh in November, where it committed more than $500m into projects and investments in Africa through the $700bn Saudi Public Investment Fund. The deals included a host of financing and energy-related ­agreements with Nigeria, Ethiopia, Mozambique, Senegal and Chad.

The Saudi minister of investment Khalid Al-Falih described the investments the oil-rich kingdom holds in Africa as a “scratch on the surface” as it looks to expand into multiple sectors, including energy, education and agriculture.

Over 50 African leaders, including the presidents of Djibouti, Egypt, Ethiopia, Gabon, Kenya, Mauritania, Niger, Nigeria, Rwanda, Seychelles, Sudan, Zambia and Zimbabwe attended. African Union (AU) Commission chairperson Moussa Faki Mahamat and AU chairperson Comoran President Azali Assoumani were at the summit.

Water, debt, FDI

The kingdom has been seeking to diversify revenue sources away from hydrocarbons, aiming to increase its non-oil share of GDP from 16% to 50% by 2030. As part of its plan, the country said it will make $25bn in investments, secure $10bn from exports, and finance development projects worth $10bn in Africa by the end of this decade.

Saudi Arabia’s focus on Africa includes a $1bn fund for water projects to be set up by 2033, as well as security programmes and cleaner energy projects targeting at least 750 million people across the continent.

Saudi Crown Prince Mohammed bin Salman has declared his intention to provide backing for African debt relief initiatives: “The kingdom is keen to support innovative solutions to address African debt, as it sought during its presidency of the G20 in 2020 to launch initiatives to suspend debt service payments during the pandemic for low-income countries, and the Common Framework for Debt Treatment initiative in many African countries,”  he said when he spoke at the Riyadh summit.

During a Saudi-Moroccan Economic Forum which took place in Riyadh on 22 January, Saudi and Moroccan private sectors agreed to establish a joint investment fund to advance economic cooperation between the two countries and support Saudi companies in accessing African and European markets.

A  package of initiatives to support economic cooperation and integration between the Kingdom and Morocco was agreed during the summit. These include setting up direct maritime shipping projects, increasing the number of trade delegations and exhibitions, exchanging information about opportunities and markets, and accelerating the pace of Moroccan companies’ participation in Saudi Arabia’s Vision 2030.

“Saudi Arabia’s economic diversification programme seeks to have as many outward-facing investments globally as possible,” says Ryan Bohl, a Middle East analyst at risk intelligence company RANE. “It is trying to develop a mining industry and to seek diverse food supplies. Africa is also a relatively non-political place in which to invest – unlike, say, the US, where regulations and anti-Saudi sentiment can hamper investment.”

In January, for example, Saudi Arabia announced it was starting imports of meat from South Africa, as it builds ties in Africa’s most-developed economy.

“The Saudi Arabia market presents enormous growth opportunities for South African companies looking to expand their businesses in the Gulf region as shown by local companies that are slowly establishing a presence in that region,” said South Africa’s co-chair of the South African–Saudi Arabia Business Council, Stavros Nicolaou.

In 2023, South Africa’s exports to Saudi Arabia rose to R7.3bn ($387m) from R6.6bn in 2022.

Easier than Europe and US

With its human rights record under scrutiny, Saudi Arabia has often found obstacles in bringing money into Europe and the US. Saudi Arabia is attempting to outmuscle the neighbouring United Arab Emirates, which has a firm footing in Africa. According to property consultancy Knight Frank, the UAE was the largest investor in Africa among the Arab Gulf countries from 2012 to 2022 with foreign direct investment worth $59.4bn, followed by Saudi Arabia ($25.6bn).

Torbjorn Soltvedt, Middle East analyst at Verisk Maplecroft, a global risk-intelligence company, says: “Saudi Arabia also needs to maintain a strong presence in the Horn to establish a secure route for transition minerals as it seeks to acquire mining assets in other parts of Africa.”

In 2020, Saudi Arabia set up a Red Sea Council which included representatives from Egypt, Jordan, Eritrea, Yemen, Sudan, Djibouti, and Somalia. The initiative was designed to increase cooperation between countries on the Red Sea to tackle piracy, smuggling, and emerging maritime threats. However, the plan has fallen victim to disagreements among the partners which have been made more acute by the conflict in Sudan, and the Houthi attacks against shipping in protest at the situation in Gaza.

Horn focus

The Red Sea Council initiative was nevertheless an illustration of the Kingdom’s ambition to consolidate its diplomatic and physical presence in the Horn of Africa for strategic reasons linked to trade as well as security, and to this end, Saudi Arabia is making efforts towards establishing an official base in Djibouti. This includes a direct shipping route which is designed to strengthen links between Saudi Arabia and the East African market.

In terms of heightening its diplomatic influence in Africa, Saudi Arabia has taken a leading role in trying to bring an end to the conflict in Sudan.

The talks were held in partnership with the US, the African Union and the East African bloc Intergovernmental Authority on Development (IGAD), led by Kenya. Representatives of the Sudanese Armed Forces and the Rapid Support Forces have attended talks in Riyadh which were aimed to negotiate a peace agreement between the two parties, so far without success, as several short-term peace agreements have all collapsed into renewed conflict.