UAE becomes Africa's biggest investor, commits $110 billion to new projects.
The United Arab Emirates (UAE) has become the biggest investor in new business projects in Africa, committing $110 billion to various ventures between 2019 and 2023.
According to the Middle East Monitor, this includes $72 billion in renewable energy, surpassing investments from the UK, France and China.
The Guardian, citing FT Locations (a provider of investment promotion and economic development data and digital solutions for the foreign and domestic investment sector), UAE companies have pledged $110 billion in projects across Africa, surpassing traditional investors such as the UK, France and China. .
Most of the investment has been focused on renewable energy, with $72 billion dedicated to green energy projects. African leaders have welcomed the increased investment, particularly in energy and infrastructure. Ahmed Aboudouh, a research fellow at Chatham House, said:
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"African countries desperately need this money [for] their energy transition."
However, he also noted that UAE investors often pay less attention to labor rights and environmental standards.
Major UAE companies expand into Africa
Several major Emirati companies are at the heart of the UAE's investment strategy in Africa. Dubai's DP World operates six African ports and Abu Dhabi Ports has expanded into countries including Guinea, Egypt and Angola.
In Zambia, International Resource Holdings, a company linked to Sheikh Tahnoon bin Zayed, secured a $1.1 billion deal for a 51% stake in the Mopani copper mines. The investments reflect the UAE's efforts to diversify away from oil and gas and increase its presence in infrastructure African. Challenges and concerns related to investment projects
Reports indicate that not all UAE investments in Africa have gone well. In Zambia, financial difficulties at state-owned ZESCO have delayed solar projects.
There have also been concerns about the transparency of some UAE-backed companies. According to the Middle East Monitor, a Swiss report found that $115.3 billion in unregistered gold exports to Dubai took place between 2012 and 2022, raising questions about the legality and transparency of the trade.
Georgetown University professor Ken Opalo has warned of the dangers of increased foreign attention to Africa, saying:
"There is also the possibility that this attention will lead to crime, as we are seeing in the gold sector."
The UAE's economic role in Africa
Reports indicate that the UAE Ministry of Economy recently confirmed that the UAE is the world's fourth largest investor in Africa, with a total investment of $60 billion. The ministry also noted that more than 21,000 African companies operate in the UAE, reinforcing the close economic ties between the two regions.
While the UAE's financial inclusion offers significant benefits to Africa, it also presents challenges that must be addressed as these partnerships continue to grow.
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