When Sheikh Mohammed bin Zayed al-Nahyan, president of the United Arab Emirates, jetted a number of hundred associates into a personal airport within the Japanese Cape province to have a good time Eid final yr, it confirmed each the promise and pitfalls in coping with a brand new cash-rich participant in Africa.
Forward of a keep at his non-public resort in one among South Africa’s poorest areas, the UAE ruler was reported to have donated R20mn ($1mn) to improve the runway on the backwater airport, which the authorities made a world port of entry for the event.
However regardless of the mutual show of goodwill, South Africa had didn’t persuade the UAE to show over the Gupta brothers, accused by South African authorities of looting the state. The Guptas had fled to the Emirates in 2018 however round two weeks earlier than Sheikh Mohammed was touring the Japanese Cape, a Dubai courtroom refused to extradite two of the brothers citing incorrect paperwork, a ruling South Africa’s justice minister described as “shocking”.
The truth that South Africa nonetheless rolled out the pink carpet for Sheikh Mohammed and his entourage is an indication of simply how influential the UAE has turn into there and throughout the continent — and an illustration of the complexities this new alignment can generally carry.
As China pares again loans to Africa, the oil-rich Gulf state has turn into an more and more vital supply of international funding. In 2022 and 2023, the UAE pledged $97bn in new African investments throughout renewable vitality, ports, mining, actual property, communications, agriculture and manufacturing — thrice greater than China, based on fDi Markets, an FT-owned firm monitoring cross-border greenfield tasks.
A UAE official tells the FT that its whole investments into Africa quantity to $110bn, reflecting “the country’s commitment to facilitating sustainable development and growth across the continent.”
The UAE is now “going toe to toe with Beijing”, says Ken Opalo, an affiliate professor at Georgetown College within the US, of the nation’s presence in Africa. Whereas many of those investments is not going to materialise, he says, the Emirates has persistently been a top-four investor on the continent over the previous decade.
Firms from the UAE have embraced tasks in Africa that extra risk-averse traders have averted. Africa has a lot “to offer in terms of commodities and minerals,” says Hamad Buamim, chair of Dubai’s major buying and selling hub the Dubai Multi Commodities Centre, regardless of the “challenges when it gets to policies and politics”.
This wall of cash is permitting the UAE to assist form not solely their nations’ financial destinies, however in some circumstances the political fortunes of some African leaders. When fighters from the Tigray Individuals’s Liberation Entrance had been threatening Addis Ababa throughout Ethiopia’s civil warfare in 2021, the UAE supplied navy drones to the federal government, based on a senior US official and Tigrayan leaders. The UAE official says it “supports the institutions and people of Ethiopia rather than any particular parties or individuals”.
When Sudan’s generals deposed Omar al-Bashir in 2019, the UAE stepped in to bail out the brand new regime, later lending some help to the paramilitary Speedy Assist Forces within the civil warfare that erupted final yr, based on a UN panel of consultants. The UAE strongly denies backing both aspect within the battle and has publicly advocated for peace.
Murithi Mutiga, Africa Programme Director at Disaster Group, a non-profit, says the UAE’s engagement in locations like Sudan is partly motivated by its need to counter Islamist extremism. However, he says, it has additionally seized the prospect to diversify its financial system with investments in meals safety, vital minerals and renewable vitality.
All of that makes its impression ambivalent, Mutiga says. “China is a status quo power, Russia is a revisionist power and the UAE veers between the two,” he provides, referencing two of the opposite main international gamers in Africa.
Western officers say the rising affect of the UAE and different Gulf nations in Africa provides a brand new layer of complexity. “This is the new world we’re in, where you have middle powers and global powers operating on the continent,” says one former official within the Biden administration, who didn’t need to be named.
Whereas the affect of Abu Dhabi — the UAE’s oil-rich capital and international coverage setter — has risen lately, Dubai, the area’s monetary and buying and selling hub, has lengthy been an vital monetary centre. African corporations are selecting to base themselves there to commerce with the remainder of the world, says Buamim. “This is where Dubai really played its cards quite well: to be the gateway to Africa.”
The variety of African corporations registered in Dubai has elevated dramatically previously decade, reaching 26,420 by 2022, based on the Dubai Chamber of Commerce. “Dubai is New York for Africans now,” says Ricardo Soares de Oliveira, a professor of worldwide politics at Oxford college who has studied Africa-UAE hyperlinks.
The UAE official says that its engagement in Africa, from commerce to meals safety and counterterrorism, was in pursuit of “fostering a prosperous future based on mutual benefit”. However some see the UAE’s inroads into Africa as half of a bigger imaginative and prescient to wield extra energy on the world stage.
Saad Ali Shire, finance minister of Somaliland, the breakaway republic by which Dubai-based logistics enterprise DP World has invested closely, has no doubts in regards to the Emirates’ rising clout. “The UAE is a new superpower in Africa,” he says.
Emirati engagement with Africa suits into three broad, if overlapping, classes. The primary is solely industrial, the second strategic and the third is a monetary function, historically performed by international centres similar to London or Zurich, by which Dubai has turn into a pretty jurisdiction for Africans to commerce, do enterprise and park offshore cash.
“What’s driving this for the UAE, and of course for other Gulf countries as well, is the energy transition and the hard push for economic diversification,” says Anna Jacobs, Disaster Group’s senior Gulf analyst. “Africa really is this huge untapped market [with] minerals and agriculture.”
Commercially, clear vitality is one space of curiosity. Over the previous decade, Masdar, Abu Dhabi’s renewable vitality investor, has constructed infrastructure together with 5 wind farms in South Africa, a battery vitality storage system in Senegal and solar energy services in Mauritania. Masdar is main UAE plans to take a position $10bn to extend sub-Saharan Africa’s electricity-generation capability by 10GW.
However UAE corporations are additionally investing in fossil fuels. In Could, the Abu Dhabi Nationwide Oil Firm purchased a ten per cent stake in Mozambique’s Rovuma fuel basin, buying it from Portuguese vitality firm Galp for round $650mn.
In actual property, Dubai Investments, a listed conglomerate whose largest shareholder is Dubai’s sovereign wealth fund, this yr introduced it will begin work on a 2,000-hectare property improvement in Angola. The Abu Dhabi-based telecoms firm previously know as Etisalat, now e&, operates in 12 nations throughout Africa.
UAE corporations have begun to make a splash in mining too. Worldwide Sources Holding, a unit of Worldwide Holding Firm, the $240bn Abu Dhabi conglomerate chaired by UAE nationwide safety adviser Sheikh Tahnoon bin Zayed al-Nahyan, final yr paid $1.1bn for a majority stake in Mopani, a Zambian copper mine beforehand owned by Glencore. IHR has additionally expressed curiosity in investing in mines in Angola, Kenya and Tanzania.
Final yr, Primera, an Abu Dhabi-based gold dealer, was granted a 25-year monopoly by the federal government of the Democratic Republic of Congo for all small-scale “artisanal” gold provides within the nation. A lot African gold, each authorized and smuggled, passes by way of Dubai, based on consultants and African authorities officers.
Peter Pham, a former US particular envoy to the Nice Lakes area for President Donald Trump, describes UAE African mining ambitions as “relatively benign” and in keeping with Washington’s pursuits. “They dilute the Chinese and they provide an alternative supply chain,” he says. “If they can pull it off, I’m all for it.”
Not all UAE investments are freed from controversy. In Tanzania, authorities have been accused by human rights teams of violently forcing 1000’s of Maasai off their land to make manner for a safari and looking mission linked to a UAE firm. Blue Carbon, a Dubai-based non-public funding car, has been accused by activists of looking for to seize tens of millions of hectares of African forests in what they deem a greenwashing train after signing preliminary agreements in Liberia, Tanzania, Kenya, Zambia and Zimbabwe geared toward producing carbon credit.
Nonetheless, many nations welcome the Emirates’ curiosity. “The UAE is a very good partner to Kenya and many other countries,” William Ruto, Kenya’s president, tells the FT.
Maybe the most important distinction UAE cash has made is in logistics the place Emirates’ industrial and strategic ambitions overlap.
DP World is current in practically a dozen African nations after pouring some $3bn into the continent. It now operates ports from Mozambique on the Indian Ocean within the south to Algeria on the Mediterranean within the north and Angola on the Atlantic, just about encircling the continent.
“Our entry into these markets is not driven by political agenda. It’s driven by a business agenda that may derive other benefits,” mentioned Mohammed Akoojee, DP World’s chief govt for sub-Saharan Africa. He acknowledges an overarching technique of connecting Dubai to the continent by way of commerce. “There’s definitely that vision from the Emirates,” he says. “The government of Dubai uses companies like DP World and Emirates [the airline] to build a global presence.”
AD Ports, an Abu Dhabi logistics firm majority-owned by sovereign investor ADQ, operates fewer ports in Africa than DP World, however there are indicators it needs to catch up. Final yr, it gained a 30-year concession to run Pointe Noire port within the Republic of Congo and in April it secured a 20-year concession to handle Angola’s Luanda terminal, initially committing $250mn to its modernisation.
“If the government is investing in its trading partners . . . then naturally you need the private sector to come in and invest,” says Ross Thompson, AD Ports group chief technique and progress officer.
The place the place the UAE’s port investments are most clearly strategic is Berbera, the primary port of the breakaway republic of Somaliland, positioned on the Gulf of Aden, the place UAE flags might be seen fluttering within the desert panorama. DP World has invested $300mn within the port and an adjoining free-trade zone, whereas the UAE has been refurbishing the coastal metropolis’s airport. Somaliland has additionally granted the Emirates a 25-year concession for a naval base.
The political ramifications go additional. DP World took over Berbera port in 2017 shortly after the corporate was ejected from Djibouti, which accused it of “colonialism”, allegations denied by DP World. Since its transfer 250km south to Berbera, the Abu Dhabi Fund for Growth has spent virtually $90mn constructing a wise new paved highway linking Berbera with the capital Hargeisa and, crucially, on to the Ethiopian border.
This yr, in a transfer that enraged Somalia, which rejects Somaliland’s declare to independence, Addis Ababa signed an settlement with Hargeisa. In return for recognising Somaliland as a reliable state, landlocked Ethiopia would acquire entry to a stretch of shoreline on the Pink Sea the place it might develop a port and naval base.
Many see the hand of the UAE behind the daring play. “When it comes to the UAE government, they are seeking to have political influence in the region,” says one senior Somali official.
The UAE’s most controversial alleged actions in Africa have taken place in warfare zones. In 2019 and 2020, it actively supported Normal Khalifa Haftar, a Libyan warlord, after he launched an assault on Tripoli to oust the UN-backed authorities. The UAE has denied breaking an arms embargo on Libya.
Much more controversial is the UAE’s alleged fuelling of the Sudanese civil warfare by serving to to arm Normal Mohamed Hamdan Dagalo, referred to as Hemeti, an accusation the UAE has repeatedly denied. A former camel dealer with earlier hyperlinks to the Emirates, Hemeti now runs the RSF paramilitary pressure preventing for management of the nation. The RSF has been accused by Human Rights Watch of committing ethnic cleaning in Darfur.
Regardless of the UAE’s denials, an impartial panel of consultants for the UN says there’s some proof it was supplying arms within the guise of humanitarian help by way of Chad. “The UAE is not playing by any rule book in Africa,” says Cameron Hudson, a Sudan knowledgeable on the Heart for Strategic and Worldwide Research in Washington. “They’re chaos agents in Sudan.”
Albadr SS Alshateri, professor on the Nationwide Defence School in Abu Dhabi, says he has no information of the UAE’s alleged backing of Hemeti. However the UAE does suspect that the Sudanese military, led by Normal Abdel Fattah al-Burhan, could also be intently linked to Islamists. As a normal rule, “the UAE sees itself as pursuing stabilisation,” Alshateri says.
The third function that the UAE is taking part in in Africa is that of freewheeling monetary hub.
Oxford’s Soares de Oliveira says western authorized companies, funding banks and wealth managers all provide providers in Dubai — together with arbitration over disputes — that corporations from Africa and elsewhere have historically sought in London and Geneva.
“Dubai is the ideal ecosystem: it offers the same blue-chip world-class services that are essentially Anglo or Swiss, but it is lawless enough to be a free for all,” he says.
Dubai continues to be thought of a extra versatile jurisdiction regardless of being faraway from the Monetary Motion Activity Drive (FATF) “grey list” this February after two years on the naughty step, he says, though centres like London are nonetheless conduits for suspicious transactions.
Lots of the 26,000-plus African corporations registered in Dubai are “letterbox companies”, says Soares de Oliveira. “That allows Africans to keep dollars away from African economies. You pay suppliers in Dubai and the money never comes back.”
Rich Africans, together with politically uncovered individuals, additionally discover a secure harbour in Dubai the place they will purchase property and revel in a world-class life-style. Different high-profile residents embrace Isabel dos Santos, the billionaire daughter of Angola’s former president, who moved to town in 2020 days after the brand new Angolan authorities froze her property.
The increasing presence of the UAE and different Gulf nations in Africa and vice versa presents a quandary for Washington.
The US doesn’t approve of every little thing the UAE is doing there, says the previous Biden administration official, nevertheless it regards it as a significant international ally, together with within the Center East. “It’s such a challenging actor,” he provides. “In Africa, they’re both investing in positive ways and acting in destabilising ways at the same time.”
Hudson on the Heart for Strategic and Worldwide Research is extra sceptical. “It may be OK in the near term,” he says. “You let me do what I want in Sudan and I’ll give you what you need in Gaza. That’s a very transactional relationship, but it’s not a friendship.”
Alshateri at Abu Dhabi’s Nationwide Defence School says the UAE’s rise is tied to Washington’s declining affect in Africa: “They had to pick up the slack because the US is backsliding on its security commitment.”
