With cumulative foreign direct investment of $60 billion in Africa over the past decade, the United Arab Emirates (UAE) is ranked the fourth largest investor in the continent, behind China, Europe and the United States.
Africa should take advantage of UAE’s evolving economic strategy that seeks to expand its footprint across the continent through investment and trade in African ventures.
Africa is currently facing numerous challenges. To address some of these challenges, there is need to leverage new strategic partnerships and nurture relationships in economic development, trade relations and ventures that offer sustainable solutions. In particular, Africa should consider strengthening ties with the UAE) which is emerging as a willing partner for the continent.
According to a survey report by consultant firm Ernst and Young, China and the US’s share of foreign direct investment (FDI) into Africa is shrinking, with UAE significantly boosting its presence on the continent. In 2022 and 2023, the UAE pledged $97 billion investments in energy, ports, mining, real estate, communications, agriculture and manufacturing.
Recently, the UAE outlined its national priorities that include growing youth talent. Africa has the largest youth population who are mostly unemployed. At the same time, the UAE has emerged as a reliable energy provider supporting global energy security. African countries face a significant energy deficit that limits their economic growth and negatively affects the living standard of their citizens. About 600 million people in a continent of 1.2 billion do not have access to electricity, and about a billion people lack access to clean energy. Africa can look to UAE to address the energy deficit.
In the race to secure minerals for the energy transition, the UAE pledged $4.5bn to fuel Africa’s green ambitions at the COP28 climate conference last year.
The UAE is also focused on science and technology and has introduced many initiatives to develop people’s capabilities in these areas. As UAE seeks to attract talent in future industries from around the world, Africa should not be left behind.
Most importantly, Africa should strengthen ties with UAE to address some of the challenges that include debt burden.
For instance, in February, 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 to the Ras Al-Hikma peninsula on Egypt’s Mediterranean coast.
But as Africa looks to the UAE, there is need to ensure that the country’s interest in the continent is not extractive and exploitative, and that the partnership is mutually beneficial.
