Tens of billions in investments over the next decade: this is the promise Saudi Arabia has made to Africa. In late October, the kingdom’s finance minister Mohammed bin Abdullah Al-Jadaan announced $41bn of investment over the next 10 years in sub-Saharan Africa, and called on the Saudi private sector to mobilise a further $25bn over the same period.

“The relationship between the kingdom and Africa is not just based on geographical proximity. We are partners with a shared past and a shared future,” the finance minister said at the Future Investment Initiative (FII) Forum, an annual event organised in Riyadh, which for the first time included a day dedicated to the continent. The investment announcements, although yet to materialise, illustrate the oil giant’s recent economic offensive in Africa.

Historically, Saudi Arabia’s relationship with the continent has been primarily diplomatic. Initiated in the 1970s, it was given a boost by the Iranian revolution in 1979, with Sunni Saudi Arabia seeking to counter the spread of Shiism, championed by Iran, across the continent. This explains the establishment of a vast network of embassies, the awarding of grants to train ulemas and imams, the funding of mosques, not to mention the quota of annual visas per country enabling African pilgrims to visit the holy places of Islam.

Donations and cooperation

It was a soft power policy based largely on religion and paired with close relations with the leaders of certain Muslim countries. As a result, Saudi influence on the continent is concentrated in two regions: the Horn of Africa, geographically on the kingdom’s doorstep, and the Sahel, led by Mauritania and Chad.

Another feature of Saudi-African ties is that, to date, they have been very limited in economic terms, despite Riyadh’s considerable financial resources. Although Saudi Arabia did try to acquire land on the continent in the 2000s, through public and private initiatives, the attempt was short-lived. In a note published in 2020, Benjamin Augé, a researcher at the French Institute of International Relations (IFRI), described Saudi Arabia’s investments in Africa as “embryonic compared to its donations and partnerships”.

In fact, financial commitments are made mainly through the Saudi Fund for Development (SDF), which is very active in Egypt, Ethiopia, Somalia, Mauritania, Kenya, Gabon, Senegal and Djibouti. At the same time, the kingdom also uses two other channels, both based on its own territory: the Islamic Development Bank (IDB) and the Organisation of Petroleum Exporting Countries (OPEC).

$45bn in trade

But it is on the economic front that a turning point has been reached, symbolised by the holding of the first Saudi Arabia-Africa summit in November 2023. Beyond the avalanche of investment announcements – $25bn in funding between now and 2030, $5bn from the SDF, $500m in debt relief from the finance ministry, and some 50 other agreements in various fields – the aim was to get a message across: Riyadh, whose Vision 2030 development strategy resonates with the African Union‘s Agenda 2063, now intends to position itself on the continent, seen as a key area for its future growth. Hence its ambition to increase investment and partnerships there, in order to boost trade – estimated at $45bn in 2022 – and “development synergies”.

This change of direction is no accident. It comes against the backdrop of the emergence of a global South, with Saudi Arabia having been invited to join the BRICS+ countries and defending a greater role for Africa in international bodies. It is also fuelled by Riyadh’s desire to counter the growing influence of  its regional rival Qatar on the continent.

Finally, it is the result of the double shock caused by the Covid-19 pandemic and the war in Ukraine. These crises have brought two urgent issues to the fore for the kingdom, a country with a population of 37 million and solid demographic growth, but which, because of its desert climate, imports almost 80% of its food requirements: diversifying its economy to prepare for the post-oil era, and investing in agriculture to ensure food sovereignty. These are challenges that the Crown Prince Mohammed bin Salman wants to see met as quickly as possible.

Copper, nickel and grain

This is how we should read Riyadh’s recent investments in Africa in two key sectors for Saudi diversification: mining and agribusiness. After signing cooperation agreements with Egypt, Morocco and the Democratic Republic of Congo in January as part of the Future Minerals Forum, Manara Minerals – a Saudi joint venture between the Ma’aden mining company and the sovereign wealth fund, the Public Investment Fund (PIF) – announced in October that it wanted to start mining copper and nickel in Zambia.

Aiming to acquire a 15% to 20% stake in the mines operated by Canada’s First Quantum Minerals, it could spend between $1.5 and $2bn. Its objective is to secure supplies of materials, particularly copper, that are essential for the production of electric cars and other components of the future green economy. This is an important niche in which Riyadh wants to position itself as a replacement for black gold.

The Saudi push on the continent is even more visible in agriculture, with another offshoot of the PIF at the forefront: Salic, its agricultural arm. Since 2009, the company headed by Sulaiman Al Rumaih has been tasked with securing the kingdom’s supply of 12 key commodities, including rice, maize, wheat, sugar, oil, milk powder and chicken.

To achieve this, Salic has stepped up its investments and purchases in recent years, acquiring stakes in chicken in Brazil, meat in Australia, cereals in Ukraine, rice in India and grain trading in Canada, all without ever setting foot in Africa. That was until 2022, when it decided to acquire a stake in Olam Agri, a subsidiary of Singaporean giant Olam specialising in agricultural products and with a strong presence on the continent. And, less than two years after an operation valued at $1.24bn, the Saudi group has just made an offer to Olam to buy out its entire subsidiary.

The private sector in ambush

If confirmed, the acquisition will strengthen Salic’s position on the continent, particularly in West Africa, where Saudi Arabia aims to make Nigeria – an oil giant with major development ambitions akin to its own – a privileged partner, according to Sébastien Abis, a researcher at the French Institute for International and Strategic Affairs (IRIS) and the director of Club Demeter, which specialises in agricultural issues. 

Olam Agri’s portfolio includes subsidiaries in around 10 countries, including South Africa, Nigeria, Côte d’Ivoire, Ghana, Cameroon, Chad and Togo. Not all of them are profitable, but they are strategic for the countries concerned and well located for Riyadh because they are close to home. Since Olam Agri’s footprint is global, the Saudis would also get their hands on other interesting assets: Olam’s freight activities, based in Singapore but deployed internationally, the cereals terminal at the port of Azov in Russia, a country where Salic is not yet present, and units in Brazil, India and Australia, where the Saudis are already established and would therefore consolidate their position.

While Riyadh’s African offensive is largely driven by the public sector, the Saudi private sector seems keen to follow suit, breaking with its prior caution. Some of the kingdom’s major players, including the Ma’aden mining company and the Sabic petrochemicals group, have joined forces with the PIF or its subsidiaries to develop projects alongside the announced investments.

Tough competition

At the same time, these two groups are now setting their sights on Africa. Active in the eastern part of the continent, particularly Kenya, Ma’aden expanded its activities in the southern zone by acquiring Meridian in 2019. Meridian is a Mauritius-based distributor with a network of assets in Malawi, Mozambique, Zimbabwe and Zambia. As for Sabic, it spent $320m in 2022 to establish itself on the continent, acquiring 49% of its subsidiary ETG Inputs Holdco Limited (EIHL), a fertiliser trader and supplier with a strong sub-Saharan network. That is not to mention the breakthrough in renewable energies by solar plant builder Acwa Power.

However, Riyadh is far from winning the day. Despite the financial strength of the PIF, with $930bn in assets under management and a target of $2trn by 2030, Saudi Arabia is setting out to conquer Africa at a time when competition is fierce not only within the Gulf States themselves, but also with other nations including China, India and Turkey. For example, the Ma’aden-PIF tandem has seen its plan to acquire Zambian mines turned on its head by a rival bid from Japanese giant Mitsui, which is also seeking to strengthen its position in Africa.

So while Saudi hopes are strong, Riyadh still has a long way to go before it can turn them into concrete results. It will need to successfully set up its operations on the continent using local players. From this point of view, the acquisition of Olam Agri, once completed, will be a true test of the kingdom’s ability to turn its words into deeds on African soil.