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Business Daily
The UAE's growing influence in Africa
00:17:28
The United Arab Emirates has become the largest backer of projects in the continent
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- [00:00]
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Sameer Hashmi
Hello and welcome to Business Daily from the BBC World Service. I'm Sameer Hashmi. In Dubai today we look at how the United Arab Emirates has become the largest state investor in in Africa in recent years.
- [01:31]
Dr. Thani Al Ziyoudi
For the last five years, the UAE pledged around $110 billion. We start small. You don't start with the big projects and you need to test the ground. You need to understand the market and you need to see who are the main players as well or the main beneficiaries from those investments that you do.
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Sameer Hashmi
How are African nations benefiting from using this new wave of Gulf investment?
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Dr. Josie D. Lima Masano
We want to diversify the economy at a really fast pace. The thing is, oil and gas still has weight on our economy. That accounts for around 20% of the country's GDP. It creates opportunities, but also challenges.
- [02:08]
Sameer Hashmi
And what's in it for Emirati companies on the ground?
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Sultan Ahmed Bin Sulayem
What is our ambition in Africa is really to remove a lot of the obstacles in the logistics today and make basically cost of logistics and shipping much cheaper than what it is today.
- [02:23]
Sameer Hashmi
Plus, we look at allegations about illicit African gold flowing into Dubai, claims that the UAE strongly denies. That's the growing relationship between the UAE and Africa. All coming up on today's Business Daily. That's the sound of one of Africa's busiest new trade hubs, the Berbera port in Somaliland. It's run by DP World, the Dubai based logistics giant that has been operating across Africa for for two decades, building ports and trade corridors from Dakar to Maputo. But in recent years, a new wave of Emirati companies have joined in, pouring in billions of dollars into ports, power, renewable energy and logistics projects across the continent. And behind it all lies a striking shift. The United Arab Emirates has quietly become the largest state investor in Africa for new projects, overtaking traditional players. Between 2019 and 2023, Emirati companies announced investments worth $110 billion. That's more than double the value of projects pledged by firms from China, France or the uk. It's a level of ambition that's redrawing the continent's economic map. So what's driving this surge? The UAE's Minister of Foreign Trade is Dr. Thani Al Ziyudi.
- [03:45]
Dr. Thani Al Ziyoudi
The last one decade the UAE aggressively pursue its global diversification comes to investment, trade relations, economic engagements and business to business relations. And we're going to continue with this, with this approach. Africa is at the heart of this. Basically it's a neighboring continent. It's a continent which we have very close ties to. So the UAE is one of the main, one of the top importer and exporter to Africa and vice versa. And it shows how critical both parties to each other when it comes to connectivity. The re exports, attraction of investments as well as bringing some of the best practices from both sides so we can grow together. For the last five years, the UAE pledged around $110 billion which are the.
- [04:32]
Sameer Hashmi
Top two or three sectors that the UAE is targeting. Given that Africa is a huge continent with a lot of opportunities.
- [04:38]
Dr. Thani Al Ziyoudi
The first one is clean energy and energy in general. That is an expertise which we built throughout the last 18, 19 years in clean energy, renewables. Second one is logistics. And logistics does not mean only movement of commodities, but also ensuring that it is supporting the industrial developments within Africa because anything is going to be produced will have the gateway to access the world through the presence of the UAE logistical company. Third one is for sure the food security. Food security. As you know, almost 85% of our food comes from abroad. And as one of the top arable lands in the world, Africa has everything and has a huge potential to produce the food that the world needs. And there is a huge potential to create jobs when it comes to farmers bringing the latest technology to ensure the efficiency in the sector. I Don't want to forget the mining and minerals. It is one of the main global hubs when it comes to those minerals. And there is huge linkages between the technology developments and evolvements with the and minerals that the African continent has. So it's a natural partnership as well between the world and Africa when it comes to the mineral as well.
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Sameer Hashmi
China has been the leading state investor in Africa for the past two decades. It has poured in billions of dollars in massive infrastructure projects. So how is the UAE trying to differentiate its investment strategy to compete with the likes of China and other traditional state investors who have been present there for a long time?
- [06:03]
Dr. Thani Al Ziyoudi
I don't want to compare the UAE to the rest of the world because every nation has its own strategy, the way that they're running the businesses. But for the uae, we're ensuring that our investment is very, is having a social impact when it comes to creation of jobs, being away from the main cities and ensuring the villages are having accessibility to those investments, ensuring the accessibility of the energy which is needed for those people. And at the same time we ensure one, one situation for both sides. So it's not about only extraction of raw materials or minerals, it's about the partnerships.
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Sameer Hashmi
Now Africa is also facing a huge debt crisis. Many countries are struggling to service debt which has taken a massive toll on their economies. So when the UAE is choosing these projects, whether these are state backed firms or private Emirati companies, how are they evaluating whether these investments are financially viable in the long run?
- [06:52]
Dr. Thani Al Ziyoudi
We, through our government exchange program, we are ensuring that those governments are having the right laws and regulations, policies domestically so they can attract more investments, not only the UAE investments. And we've been pursuing this program with many countries around the world, especially the Africans. Second thing, which we're ensuring as well, we start small. You don't start with the big projects and you need to test the ground. You need to understand the market and you need to see who are the main players as well or the main beneficiaries from those investments that, that you do. Third one, which is as well, I see critical. Many of the African countries, they don't have the right connectivity. Connectivity is, I'm not talking about logistics, but also about airlines. And that is one of the most important things. The minute that the connectivity is there means the investors will fly in and out from those nations, which means more interest is going to come to the nation. That's why you see many of our airlines as well are expanding their destinations to the African continent. Yes, I know when it comes to debt It's a very challenging question, but it's a long term work which has to be done and we share our experience with those.
- [07:54]
Sameer Hashmi
For the uae, this investment is about far more than profit. It's part of a strategy to diversify the economy away from oil and position the country as a global hub for AI logistics and clean energy. Africa fits in neatly in that plan. The continent holds some of the world's richest mineral reserves, essential for AI chips and renewable energy technologies. I'm here at the Africa Debate Summit in Dubai, one of the growing number of Africa focused events being hosted in the uae. And it's taking place in one of the most exclusive hotels located just across the Burj Khalifa. In recent years there has been a sharp rise in gatherings like this which brings together ministers, officials, investors and business leaders to discuss the future of Africa and also the role that the Gulf is playing on the continent. It's also a great place for networking and deal making for both government officials and investors every year. Investment and trade between UAE it's not just the UAE hosting Africa focused investment events across the continent. African nations are now competing to attract Emirati businesses. Take Uganda for example. It hosts an annual business forum in Kampala showcasing investment opportunities to companies from the UAE. On the 27th to 29th, Kampala will host the 4th UAE Uganda Business Forum. Three days of engagement at the summit in Dubai, I meet Dr. Josie D. Lima Masano, Angola's Minister of State for Economic Coordination. I asked him what does Angola expect from this new face of engagement with the uae?
- [09:37]
Dr. Josie D. Lima Masano
We want to diversified economy at a really fast pace. The thing is, oil and gas still has weight on our economy. That accounts for around 20% of the country's GDP. And it creates opportunities, but also challenges. Although it requires investment, massive investment, that industry, when it comes to employment levels, it does not create as you would have in other sectors of the economy. So we want to keep on attracting investment to oil and gas, keep on exploring the potential that we have in Angola, but at the same time we have to expand the economy. So we believe that the partnership that we are trying to set up with UAE is helping us to accelerate the process. Just in the last two years, UAE companies have announced investment in Angola of around US$6.5 billion.
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Sameer Hashmi
Now if you talk about another big investor in Africa and Angola was China, which invested heavily. African countries got a lot of capital from China, but that led to a debt crisis in Africa and Angola. It's number one in terms of the countries in terms of receiving money from China and The loan repayment issues and that's really created a huge problem for the economy. When you talk about the UAE investment model, do you see this model is different compared to how China has invested with China?
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Dr. Josie D. Lima Masano
Angola managed to honor its obligations. We haven't had a case where the debt has not been served. So this is not something we complain. We are happy with the partnership that we also managed to build with China. It helped us to develop especially the infrastructure that today we are using to keep on developing the economy. When we started with China, those big deals, Angola was just coming out of a civil war and the need to rather quickly reconnect the country was present. China was instrumental in helping us to achieve that. So we are pleased, we are happy. And with UAE it's a different story. This is a point where we are now want to take the development of Angola to a different level and we want to see more investment coming to the country. Not just lending funds to develop infrastructure, but actually committing resources, taking risk in our economy.
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Sameer Hashmi
As far as the UAE is concerned, do you see more driven by equity investments where UAE companies are going to come and actually invest in projects? Not really lend money, but be partners where they're putting in money so that there's no pressure.
- [12:18]
Dr. Josie D. Lima Masano
But Barangol is still looking for funds. We are still borrowing. So if we have to borrow, we borrow. If we can borrow from uae, we borrow from uae. But at the same time we are looking for foreign direct investment.
- [12:32]
Sameer Hashmi
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- [13:42]
Sameer Hashmi
I'm Sameer Hashmi and today I'm finding out why the United Arab Emirates is increasing its investment in Africa. The UAE's playbook in Africa centers on future focused sectors like renewable energy, food security, digital transformation, infrastructure and logistics. But DP World has been investing across Africa for nearly two decades. Even before other Emirati state linked companies shifted their focus. Sultan Ahmed Bin Sulaim is the chairman of DP World.
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Sultan Ahmed Bin Sulayem
Now we are in 51 countries in Africa. We also, in addition to port activities, we started to be more involved in logistics. Because one of the interesting thing about Africa market, the growth is high, the market is there, but the logistics is very bad. Some areas which are especially Rwanda and many of the Central African countries, they don't have coastal territories that they can receive cargo. So the cargo is discharged thousands of kilometers away. And so we improved the logistics and by improving it we start to realize that there's more also to do. Especially in the availability of medicine which are necessary and available spare parts, food. When you look at statistics, Africa population is going to double. The demand is high, the growth rate. What attracts us in Africa is the.
- [15:03]
Sameer Hashmi
Growth rate going ahead. What are your plans in terms of the kind of investment you see in Africa and what kind of, I mean, let's say five to ten years from now, how significant is going to be Africa as a continent for DP World when it comes to its global operation?
- [15:17]
Sultan Ahmed Bin Sulayem
If you look at the world today, Africa is important. India and India subcontinent, we put a lot of importance on that. And that's why you see where the heavy investment there. What is our ambition in Africa is really to remove a lot of the obstacles in the logistics today and make basically cost of logistics and shipping much cheaper than what it is today. I give you example, it used to cost $10,000 to pick up a container from Dar es Salaam or Mombasa to Rwanda. When we came in, we studied the market, we looked at the tray at trucks routes and we changed it. And we were able to do from $10,000 to 3,800 and coming down from two weeks to only 48 hours by us getting involved and by putting proper center, by putting also a logistic on the border, by fixing the system. My really biggest wish is that with the continental African Trade Agreement, which today I think only 11 countries are so far signatory out of 51 or 54, the more they sign, the more it's going to be better. This is our ambition.
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Sameer Hashmi
I want to pick up Mr. Bin Suleim also on the challenges when it comes to doing business in Africa. I want to Touch upon is what happened with Djipoothi. You were operating a container terminal there, but then it was abruptly cancelled by the government of the day and it was a long legal dispute. How do you avoid these kind of challenges in Africa? Because one of the perceptions about Africa has been the political challenges that come along and the instability. So as a business, how do you deal with that?
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Sultan Ahmed Bin Sulayem
Actually, you know, nationalization and the aggressive approach of a government like Djibouti we haven't seen anywhere in the world. And that was unexpected where we came to a place where there's no business. We created, we funded it. And basically, unfortunately, the government got the wrong advice and the wrong decision made. And despite us pleading to them, listen, if you don't want us, let's sell. When they visit you, they said, no, we're going to sue you. That's an issue in Africa, I admit, but I haven't seen it in other places. And because of that, actually what happened, we learn. We learn what to do and how to avoid something like that. We invest actually in Africa in partnership with European institutions because these European institution countries have already agreement between these countries of protection, investment and so on, which is, which helps us. In the past, corruption and no governance was there. Today is not as much, very little. We don't face it in our issues. Except for one country, unfortunately is Djibouti, but that's an anomaly. But the rest of Africa, there's no issue at all.
- [17:55]
Sameer Hashmi
But not all the attention on the country's expanding role has been positive. A recent investigation by Swiss aid and advocacy group found that in 2022 around 435 tons of gold worth more than $30 billion were smuggled out of Africa. The report said that the UAE was the main destination, receiving about 405 tons that year and more than 2,500 tons over the past decade. I put those allegations to the UAE's trade minister.
- [18:25]
Dr. Thani Al Ziyoudi
Those attacking PRs are coming from certain NGOs or certain media based on reports which is not valid. The process is there, the system is there. The responsible sourcing and the reporting when it comes to as well, those transactions are already happening and we're doing a normal and frequent checkup into the system. So we ensure that the system is right. The UAE is becoming one of the top three players in gold. And that's why for sure, the minute that they're seeing you, that you're muscling up your capabilities when it comes to gold, for sure you'll be attacked. Are we responding? Absolutely. Responding in terms of just checking that there's no leakage in the system when it comes to gold. Are we going to continue? Absolutely. As long as we're doing everything legal, we're going to continue as long as we're doing the right and legitimate processes within the sector.
- [19:15]
Sameer Hashmi
From ports and power to precious metals, the UAE's footprint in Africa is growing fast. What began as scattered investments is now a defining part of the Gulf's global economic strategy, one that's also helping the UAE build soft power and deepen its diplomatic influence across the continent. For African nations eager for new partners, that could mean fresh opportunities, but also new dependencies. That's it for today's Business Daily from the BBC World Service, presented by me, Sameer Hashmi. Thanks for listening.
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