UAE’s Africa push prompts cautious optimism

With $60bn of investment in Africa in over a decade, the United Arab Emirates is emerging as one of Africa’s most consequential investment partners.

COP28 in Dubai in December 2023 was key in outlining a roadmap for the years ahead. There, concessions were given to Emirati companies to develop green initiatives in Angola, Uganda, the Republic of Congo, Kenya and Mozambique including solar, hydraulic and geothermal energy projects.

Between 2019 and 2023, Emirati companies announced $110bn of projects in Africa according to data provider FT Locations – $72bn of them renewable energy projects.

Elsewhere, logistics giant and UAE-based DP World is making large investments in port facilities and operations on the continent, and UAE’s International Holding Company – which has a market cap of AED892.8bn ($243bn) is pursuing projects in health, fintech and mining.

The Africa Debate event, held in October 2024 in Dubai, offered a chance for the United Arab Emirates as a whole to boast of its willingness to invest in key sectors across the continent.

“The UAE’s increasing role as Africa’s largest investor signals a shift in global economic dynamics,” Carlos Lopes, honourary professor at the University of Cape Town’s School of Public Governance, tells African Business.

“Middle powers, like the UAE, are stepping into roles traditionally held by donor countries and, more recently, China.”

A developing relationship

African-UAE cooperation has been steadily rising since the early 2000s. Artur Frantz, research fellow at the South American Institute for Policy and Strategy, says interest spiked when Dubai sought to diversify its oil-based economy by investing in hydrocarbons revenues abroad, including investments in African infrastructure, tourism, agribusiness and mining.The oil sector’s contribution to the UAE’s GDP went from 57% in 1975 to 17% in 2020.

Vera Songwe, founder of the Liquidity and Sustainability Facility – a finance mechanism aimed at improving the liquidity of African sovereign debt – tells African Business that this bid to diversify from the UAE’s resource-driven economy means that the relationship with Africa goes beyond the raw materials extraction that motivates other partners.

“The focus is on economic growth, job creation, and green development rather than short-term extraction of resources,” she adds.

Lopes agrees, adding that “their investments are motivated by long-term strategic goals, aiming to develop a diversified, sustainable economy across the continent while mitigating risks in ways that are distinct from those of traditional powers.”

Husam Mahjoub, Sudanese tech expert and ex-president of the London Business School’s Gulf Association, adds that the UAE’s technical expertise and rapid infrastructure execution distinguish it from other players.

“Unlike Western institutions like the World Bank and IMF, which impose bureaucratic conditions, the UAE delivers high-standard projects quickly.” In addition, “rather than sending large numbers of its own workers, as China does, the UAE acquires stakes in major companies, banks, and logistics firms, exerting influence without visible foreign dominance.”

Infrastructure and renewables focus

Infrastructure is one of the major areas of mutual interest underpinning the expanded relationship. 

The UAE, which grew from a series of impoverished minor desert sheikhdoms into a major Middle East hub within decades, offers substantial experience in building major urban infrastructure projects, something Africa can benefit from as it seeks to move away from its own natural resources dependency and close its enormous infrastructure gap. In late 2023, the African Development Bank estimated that between $130 and $170bn was needed for infrastructure development every year to be able to solve inequalities. At the same time, the Global Competitiveness Report, issued at Davos’ World Economic Forum in 2023, ranked the UAE as fourth globally in infrastructure quality.

As the continent battles the consequences of climate change and looks to extend electricity to the 600m Africans who are reported to lack access, renewable energy is also emerging as an area of intense cooperation. The International Renewable Energy Agency says that the Middle East is the fastest-growing region outside China in terms of adding capacity to the renewable energies market. 

“The UAE has built world-class expertise in renewable power, with companies like Masdar and AMEA Power leading Africa’s green electrification,” Songwe says. 

Having co-chaired the Independent High Level Expert Panel on Climate Finance in Egypt during COP27, Songwe says that agreements supporting Africa’s green industrialisation, “can accelerate the deployment of clean power while ensuring energy-intensive industries transition sustainably, creating long-term socio-economic benefits.”

Infinity Power, a joint venture between UAE’s Masdar and Egypt’s Infinity, is heavily involved in the market.

The Emirati-Egyptian company has so far raised financing of over $1bn, and its goal is a continent-wide presence with 10 GW of capacity installed by 2030 through their solar, onshore wind and hydrogen energy solutions.

The venture’s deputy CEO Ahmed Mulla tells African Business that “what Masdar brings is scale, technical and procurement excellence and the financial firepower to make big projects happen.”

“We see Africa as the world’s next major renewable energy beacon and we are committed to making that vision a reality,” he says.. 

Infinity Power claims that 85% of their local workforce are African: “this ensures our projects drive long-term economic benefits at the community, regional, and national levels.”

Self-interest?

However, Husam Mahjoub, who has been a critical voice of UAE’s business practices in Africa, warns that other UAE-backed renewable projects “are designed to generate carbon credits, which allow corporations and governments – including the UAE itself – to offset emissions while continuing fossil fuel production elsewhere.”

A SourceMaterial investigation by Le Monde and The Telegraph in 2023, suggested that Blue Carbon —owned by Dubai’s Sheikh Ahmed al-Maktoum— had signed deals to acquire vast tracts of land across Africa for offsetting projects. Back then, Axel Michaelowa, a scientist at the University of Zurich told SourceMaterial that these could generate as many as $250m “avoided deforestation” credits a year. In addition, at an earlier SourceMaterial investigation, the Guardian and Die Zeit revealed that “as many as 94% of the forest offsets most commonly used in carbon markets do almost nothing to mitigate climate change.”

“For these projects to truly support Africa’s green transition,” which the UAE’s infrastructure, financial power and know-how can do, “they must prioritise local energy needs rather than focusing on carbon credit trading,” adds Mahjoub.

Resources push

Emirati-led environmental projects in Africa are not the only business focus 0 resource-extractive activities are also a priority for the UAE.

Copper, cobalt, nickel, graphite, lithium are some of the materials that the UAE companies help to extract from African mines to power their industry.

A recent big bet was the Emirates’ investment in Zambia’s Mopani Copper Mines, through the state-owned International Holding Company’s (IHC) acquisition of a 51% stake from Zambia’s state mining company, ZCCM. IHC will invest funds into Mopani to help with short-term working capital and finance the completion of the mine development, ZCCM said. 

Vera Songwe says that “Mopani can now access financial arrangements that support integrated energy solutions, including developing clean power plants to power operations.”

She also adds that “more broadly, Emirati conglomerates are eager to develop industrial supply chains, leveraging their expertise, capital, and strong relationships to drive sustainable resource development.”

The illicit gold trade

Nonetheless, some UAE activities are reported to fuelled illicit trade and conflict, especially when it comes to gold.

“As part of its economic diversification strategy, gold serves as a highly liquid and globally valuable asset, reducing reliance on oil and gas,” Husam Mahjoub adds. “However, gold’s minimal paper trail also makes it ideal for discreet financial operations, enabling countries like Sudan and Russia to bypass international sanctions through Dubai-based networks.”

According to a report released in May by Swissaid, the UAE was by far the main destination for African smuggled gold in 2022, with some 405 tonnes of undeclared output from Africa ending up there.

From 2012-22, some 2,569 tonnes of African gold worth around $115bn reached the country.

Each year, between 321 and 474 tonnes of artisanal gold are produced in Africa without being declared, equating to a value of between $24bn and $35bn. 

Moreover, in 2022, the US Treasury Department stated that “more than 90% of DRC gold is smuggled to regional states, including Uganda and Rwanda, where it is then often refined and exported to international markets, particularly the UAE”. 

In November, African Business reported that Nigerian President Bola Tinubu’s administration had opened talks with the government of the UAE –  identified as the prime destination of gold smuggled out of Nigeria – to help staunch the illegal flow. This formed the subject of discussion in a meeting in late October between Nigeria’s minister of solid minerals Dele Alake and the UAE ambassador to Nigeria, Salem Saeed Al Shamsi.

Elsewhere, the gold trade has also been associated with major conflicts like Sudan’s civil war. In a New York Times report by the title “the gold rush at the heart of a civil war”, they suggest that “the Emirates is a major hub for the Rapid Support Forces (RSF), which uses front companies controlled by General Hamdan [Mohamed Hamdan Dagalo, leader of the RSF] and his relatives to sell gold and buy weapons.” 

The US Treasury Department has imposed sanctions on UAE-based companies for gold-purchasing which is alleged to have benefited the RSF and for aiding the paramilitary group with logistical support and weaponry. Despite the UAE having denied allegations of complicity with the RSF and pledged it will stop transferring weapons, Husam Mahjoub claims that “satellite imagery captured between December 2024 and February 2025 showed drones and newly constructed hangars at an RSF-controlled airport in Nyala, South Darfur.”

“History shows that when external actors gain significant economic leverage, they often use it to pursue political and strategic advantages, leading to imperialist or sub-imperialist behavior,” Mahjoub states.

“This is a central challenge with rising powers like China or the UAE: even when their investments are presented as partnerships, they often carry strategic motives, create hidden dependencies, or involve coercive practices.”

Cautious optimism

Still, Carlos Lopes claims there is a sense of cautious optimism among African countries regarding UAE investment.

“Many view it as a refreshing alternative to the old colonial powers, especially given the UAE’s focus on infrastructure, mining, and energy – areas that directly benefit the continent’s development,” he argues. 

“However, there is also awareness that more foreign players means increased competition, and the challenge is ensuring that these investments are truly advantageous for Africa, rather than leading to exploitation or undue influence.”

Alex Vines, Africa programme director at Chatham House, says one of the major challenges for the relationship will be establishing projects that create higher value jobs for African employees. 

African infrastructure projects that originate abroad -notably from China- have been notorious for employing low-skilled African labour while parachuting in senior management from abroad.

“African expectations of the UAE are rising”, Vines says, “and becoming the biggest investor in Africa carries responsibility to not just replicate extractive business practices of others – but provide true local value addition.”

If approached strategically, the UAE’s technology, logistics expertise, and investment capacity could benefit Africa, Husam Mahjoub believes. “Its port developments and transport hubs could better integrate African economies into global trade, while transparent renewable energy investments might address the continent’s energy deficit. As a global financial hub, the UAE could also help African businesses access capital and trade finance.”

But he adds that African nations must ensure transparent contracts in infrastructure and energy deals, guaranteeing that local communities benefit from these agreements; demand reinvestment and challenge wealth extraction; and should negotiate collectively to avoid dependency on UAE-controlled ports, logistics, and finance.