The Donald Trump administration says it will start assisting American companies looking to invest in Western Sahara, delivering on a promise made five years ago when the US president first recognised Moroccan sovereignty over the disputed territory.

Deputy Secretary of State Christopher Landau disclosed the policy shift on Thursday 25 September following a meeting with Morocco‘s foreign affairs minister, Nasser Bourita, on the sidelines of the UN General Assembly in New York.

The federal government will now be able to loan money and help de-risk investments by private American companies through agencies such as the US International Development Finance Corporation (DFC) and the Export-Import Bank of the United States.

“I met with Moroccan FM Bourita yesterday [Wednesday] to celebrate our longstanding partnership and discuss opportunities to expand prosperity for both our countries,” Landau said on X. “I was pleased to announce that we will support US companies looking to invest and do business in all of Morocco, including Western Sahara.”

Trump’s senior adviser on Arab and Middle Eastern affairs, Massad Boulos, expounded on the ramifications in a briefing with members of the foreign press corps in New York before heading off to his own meetings with Bourita and his Algerian counterpart, Ahmed Attaf.

“We are absolutely supporting – encouraging and supporting – US investments in Morocco, in the entire Morocco, which includes the Sahara,” Boulos told The Africa Report. “And we’re fully supporting with regards to financing these projects, starting with the DFC, primarily the DFC, but also other institutions, the US EXIM Bank and others.”

Trump’s promise kept

At the tail end of his first term in 2020, Trump handed Rabat a major diplomatic victory in recompense for normalising relations with Israel as part of the Abraham Accords. Under international law, Morocco is considered an occupying power over its southern half.

Operating out of a refugee camp in Tindouf, Algeria, the self-declared Sahrawi Arab Democratic Republic (SADR) backs an independence referendum for the native Sahrawi people, which is bitterly opposed by Rabat. The SADR is one of 55 full members of the African Union.

Alongside recognising Morocco’s claims of sovereignty in December 2020, the first Trump White House promised incentives to help advance a political settlement with autonomy – not independence – for the Sahrawis.

“To facilitate progress toward this aim, the United States will encourage economic and social development with Morocco, including in the Western Sahara territory,” the White House said at the time. Washington also promised to open a consulate in the Western Sahara territory, in Dakhla, “to promote economic and business opportunities for the region”.

With Trump’s defeat in the November 2020 election, the policy remained in limbo, with the Joe Biden administration neither rescinding it nor doing anything to advance it.

Losing ground to China

The lack of movement has put American companies at a disadvantage as other countries rushed to invest in the resource-rich territory.

France followed the US recognition in 2024 and almost immediately went to work, with the French Development Agency (AFD) announcing plans to invest €150m ($167m) in Western Sahara in 2025-2026.

The Chinese have also started looking at the region, although Chinese electric vehicle battery materials manufacturer Huayou has denied reported plans to invest $20bn in a Western Sahara plant.

Puneet Talwar, former US ambassador to Morocco, sees the shift as a net positive for America.  

“It’s good that we’re not disadvantaging American businesses, who should be on a level playing field,” Talwar tells The Africa Report. “Especially with interest from China and others.”

As for areas of possible investment in Western Sahara, Morocco has launched a $1.2bn mega-project to transform the once sleepy port of Dakhla into a gateway to West Africa while approving billions more for green hydrogen projects.

US company Ortus Power Resources is part of a joint venture, ORNX, with Acciona of Spain and Nordex of Germany to produce ammonia, a key ingredient in fertiliser.

“Morocco’s Green Hydrogen offer represents a huge opportunity,” Talwar says. “Western Sahara is a very valuable piece of land from a renewable energy perspective. It has perhaps the best combination of wind and solar globally.”

We’re not asking about money. We’re really asking about trust signals to investors

“I’m sure Morocco is also looking to develop tourism and other sectors there as well,” he says.

Last year, Morocco’s industry minister, Ryad Mezzour, visited Washington to urge the US to clarify its regulations and encourage private sector investment, notably in green energy.

“We’re not asking about money,” Mezzour told The Africa Report at the time. “We’re really asking about trust signals to investors.”

The ORNX deal has drawn the attention of Belgium-based advocacy group Western Sahara Resource Watch.

“Given that Morocco has no sovereignty or administering mandate over Western Sahara, what legal reasoning is behind the decision to establish companies under Moroccan law, intended for a project outside of Morocco?” the group said in a 10 April 2025 letter to Ortus Power.

‘You can’t ask the Sahrawis to stay frozen in time‘

For Talwar, US investments could prove a blessing for the Sahrawis.

“I don’t think that doing this necessarily hurts the effort to find a political solution,” he says. “If anything, you can’t ask the Sahrawis to stay frozen in time economically. And I think [if] done the right way, this step can complement a political solution.”

As for the SADR’s main patron, Algeria, Talwar suspects they’ve been bracing for this week’s announcement for a long time.

“I don’t think it’s going to come as a huge surprise to anybody. So I don’t think it has any significant negative impact,” he says. “I think the more significant issue for them was the initial recognition of Moroccan sovereignty in 2020.”

Boulos appeared to get ahead of any negative reaction in his press briefing, highlighting America’s investments in Algeria, unprompted, after The Africa Report asked him about Western Sahara.

“We’ve recently announced two huge contracts in Algeria, with ExxonMobil and Chevron on fracking,” Boulos said. “We also announced a very large project in the agricultural sector with Algeria.”