Investments from Gulf countries in Africa are increasing in number. In a recent report, the African bank AfreximBank analyzes this trend over the period 2012-2022. It is clear that the growing interest of these countries in the African continent is increasingly strong. Decryption.
It is often said that Africa attracts investors. The countries of the Gulf Cooperation Council (Saudi Arabia, Oman, Kuwait, Bahrain, the United Arab Emirates and Qatar) are not left out. Illustration last summer with the acquisition of a 25% stake in the South African carrier Airlink by Qatar Airways.
Of all the Gulf countries, the United Arab Emirates invests the most in the continent, followed by Saudi Arabia and the Qatar. During the study period, between 2012 and 2022, the Emirates became the fourth direct foreign investor in Africa, behind China, the European Union and the United States!
Africa has many assets
Egypt is at the top of the podium, the first recipient of these investments to the tune of 11 billion dollars. Then comes the Moroccol’AlgeriaNigeria and‘South Africa. Investments are therefore made almost everywhere, but mainly in the largest economies. The report ofAfreximbank explains very well the interest of the Arab States in the continent. This year, its population will reach 1.5 billion inhabitants, which implies a large workforce in particular, but also an increasingly strong domestic demand!
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-Africa is also a strategic region, very rich in natural resources such as cobalt, gold, copper but also coffee for example. The potential for economic growth is therefore very great. For all these reasons, by 2050 the continent is projected to become much more important to the global economy. The Gulf countries are also interested in the agricultural potential of Africa, since in the Gulf the climate is arid, very hot and dry, not very conducive to crops. So, Arab countries come to Africa to look for arable land, to produce what they need to ensure their food security. We are talking about monopolization, this is obviously debated. And then their proximity to the Horn of Africa is another explanation for their investments in the eastern countries of the continent. The two areas are only separated by the Red Sea or the Gulf of Aden.
Many popular sectors
Let’s not be exhaustive, but the Gulf States are investing in key sectors. Let’s remember agriculture, we explained it just now, for example in Egypt and Sudan. But there are also renewable energies like in Morocco, or even telecoms, transport, the banking sector and infrastructures such as ports, airports and logistics networks. Finally, for the Gulf States, due to their geographical location, it is particularly interesting to establish themselves as a pivot between Asia and Africa.
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Investments that are useful to African countries. At a time when Chinese loans and European aid are increasingly weak, the continent’s leaders must seek and above all must find other sources of financing. Recently, the construction of a gas pipeline between Morocco and Nigeria was signed, a design possible thanks to a partnership between the Shereef Kingdom and the United Arab Emirates.
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