Photo: AFP/Kola Sulaimon
Meszár Tárik
08/03/2024 05:00
Investments
After China, the EU and the United States, the United Arab Emirates (UAE) has been the fourth largest investor in Africa over the last ten years. The United Arab Emirates’ investments in Africa amounted to almost 60 billion dollars during this decade. These were mainly concentrated in the areas of infrastructure, energy, transportation and logistics.
Africa is gradually becoming one of the most important markets for the UAE. The Arab country recognized the enormous potential of the continent’s emerging markets early on and is working hard to develop new markets.
The UAE is not only one of the leading exporters of goods to many African countries, but also the largest importer of goods and raw materials to ten African countries, including Kenya. The UAE’s total non-oil trade with Africa reached USD 953 billion in 2023 - and this figure is expected to rise further in the coming years as UAE authorities make concerted efforts to further diversify their trade and business interests in the region.
Geostrategic interests
The important question arises as to what exactly is the motivation behind the Emirates’ increasingly strong role in Africa. There are economic and geostrategic interests behind the Arab country’s efforts. On the one hand, African gold offers the UAE leadership the opportunity to stabilize and diversify the country’s economy; on the other hand, control over certain African ports and sea routes is important for its trade network and security. The UAE’s primary goal is to gain an advantage over its neighbors and become a regional and global hub for trade, travel and cargo. Control over the sea lanes will allow them to transport their goods safely and strengthen their regional presence. In addition, the economic opportunities of the African market are also attractive to them.
The UAE’s straits strategy focuses on three straits:
In this context, it can be said that the Arab country’s regional aspirations combine three interdependent political dimensions:
Some believe that the presence of the Arab Gulf state in the Horn of Africa is linked to the goal of weakening Iranian influence on the strategic shipping routes near the Strait of Bab al-Mandeb. The Bab al-Mandeb is a so-called chokepoint and is considered a strategic point whose interruption could have a significant impact on world trade. The aim of the UAE is to secure trade and energy supplies between the Persian Gulf and the Red Sea and to counter Iranian-backed political and religious groups in the region. For these reasons, the Bab al-Mandeb is an area of critical importance as it separates Africa from Asia and millions of barrels of oil and other goods flow through this area every day. The UAE fears that Iran (through its proxy organizations) could bring this strategic route under its influence and disrupt international shipping. It is therefore hardly surprising that the Arab state has established military bases and ports near the strait and is involved in the war in Yemen to fight the Iranian-backed Houthi rebels.
Saudi Arabia is also interested
It is worth noting that the competition between Saudi Arabia and the United Arab Emirates for more influence in Africa is intensifying. The former recently signed an agreement worth more than 2 billion riyals (approximately 533 million dollars) at a conference with African countries, which has significantly strengthened the Kingdom’s ties with the continent. In addition, the so-called Arab Coordination Group, which consists of various development foundations in the region, has pledged 50 billion dollars to support Africa, which it will provide until 2030. According to the Saudi Minister of Economy, the 73 billion dollar Saudi investment in Africa to date is “just a drop in the ocean” in terms of future prospects for trade and cooperation with the black continent.
Both the UAE and other Middle Eastern countries have recognized Africa’s economic and geopolitical potential and are making serious efforts to strengthen ties with Africa and increase their influence. As a result, a dynamic Arab competition for African influence and resources is expected in the future.
The author is a senior researcher at the Eurasia Center
