Departures from DXB (Dubai International Airport): Africa-bound gates are now operational
New and Shining Horizons: UAE's Booming Investments in Africa
Step into the Future
I, for one, felt let down by Dubai in 2018. The city seemed stale, a remnant of its once prodigious zero-to-a-hundred economic miracle. However, a new perspective reveals a different tale from an African lens. The UAE's interest in Africa might have been on the verge of taking off, as China's growth eases back and the US turns inward.
Financial Times Says it All
Between 2022 and 2023, the UAE pledged a staggering $97bn in new African investments, spanning sectors like renewable energy, ports, mining, real estate, communications, agriculture, and manufacturing. In contrast, China's total new loan commitments to Africa in 2022 were only $995.5m, a huge drop from its peak of $28.5bn in 2016.
A World of Opportunities for Both
Africa is home to about half of the world's fastest-growing economies. The UAE, with a growth rate of 3.6%, is thriving in this global average, with KPMG predicting a stunning 6.7% growth in 2025 due to diversification, increased oil output, and burgeoning tourism.
Food Security: A Common Concern
Africa has 60% of the world's uncultivated arable land, and agriculture accounts for 35% of Africa's GDP and employs more Africans than any other sector. With this, the food and agriculture market in Africa could increase from $280bn a year in 2023 to a mind-boggling $1-trillion by 2030.
A Growing Presence in the Private Equity Sphere
"The positive vibes in the private equity space are palpable," says Badian Maasdorp, a South African private equity investor with an interest in Dubai. He believes that the flow of private capital from the Emirate into Africa is set to increase, despite initial skepticism.
Africa's Treasure Trove
Africa's wealth lies in its plentiful commodities, a fast-growing population, and geopolitical relevance. The UAE, with its deep pockets and ambitious vision, is well-positioned to capitalize on these opportunities. So, while Dubai may appear less dazzling to some, its investments in Africa hold the key to a bright future.
References:
- Gulf News - UAE Invests $97bn in Africa: What’s Behind this Massive Expansion?
- Financial Times - The UAE’s $97 billion investment boost for Africa
- Africa.com - Unpacking the UAE's grand African investment plans
- Al Jazeera - UAE invests billions in Africa as part of long-term strategy
- The National - UAE eyes 'big opportunities' in Africa but warns of 'unscrupulous individuals exploiting its goodwill'
Enrichment Insights:
- Investment Footprint and Value: Since 2019, the UAE's investments in Africa have skyrocketed to $110 billion, making it the continent's largest investor. Over 65% of this commitment is dedicated to renewable energy projects[1][3].
- Key Investments and Projects: The UAE has been investing in Africa's oil and gas sector, with companies like XRG acquiring interests in Mozambique[1][5]. Masdar, a UAE-based company, has pledged $2 billion to renewable energy projects in Africa by 2030[1][3].
- Impact on African Economies: The UAE's investments will help diversify African economies and support infrastructure development, and its role extends beyond economic investments, with active involvement in African diplomacy[2][3]. However, there might be concerns regarding the environmental impact of energy projects and potential economic dependency on foreign investment.
- The UAE's commitments to African investments have increased significantly, with a recent pledge of $97bn spanning sectors like renewable energy and mining.
- In 2025, it's expected that the UAE's growth rate will surge to 6.7%, thanks to diversification, increased oil output, and growing tourism, making it a key player in the macroeconomic scene.
- With 60% of uncultivated arable land and agriculture contributing 35% to Africa's GDP, the food and agriculture market is poised to skyrocket from $280bn in 2023 to a staggering $1-trillion by 2030.
- The UAE's presence in the private equity sphere is expanding, with many predicting an increase in private capital flow from the Emirate into Africa, despite initial skepticism.
- Africa's wealth lies in its abundant resources, fast-growing population, and geopolitical relevance, making it an attractive target for global investors, especially those with ambitious visions like the UAE.
- The boom in energy projects, sports infrastructure, and lifestyle developments could drastically transform the African landscape, potentially impacting the average lifestyle and weather patterns in the years to come.
