A recent study pointed to the growth of Gulf investments in the countries of the Horn of Africa, especially in Ethiopia, Sudan, Somalia and Djibouti.
Africa has become an increasingly vital partner for the Gulf states. Investment flows from the Arab Gulf to sub-Saharan Africa amounted to about $3.9 billion between 2005 and 2015, according to recent statistics based on completed projects.
The Russian-Ukrainian crisis highlighted the strategic importance of the Horn of Africa region in terms of its strategic location overlooking the oceans, global trade routes and straits heading from the Gulf states to Europe and the United States.
A recent study issued by the King Faisal Center for Research and Islamic Studies on foreign investment in African countries showed that Gulf companies invested more than $1.2 billion in the sub-Saharan African region, from January 2016 to July 2021, with 88 percent of projects coming from the UAE and Saudi Arabia, followed by Qatar and Kuwait.
The study noted that the region enjoyed attractive investment potential, as 44 percent of its agricultural area is still unexploited, in addition to its great livestock and oil wealth.
Saudi Arabia invests about two million hectares in a number of African countries, while a large proportion of the Kingdom’s agricultural projects are concentrated in eastern Africa.
Djibouti, which is located on the Bab al-Mandab strait, has become a logistical hub for agricultural trade movement between Saudi Arabia and East Africa.
Saudi investments in Sudan have also increased, according to the study. The value of joint projects over the last two decades amounted to $35.7 billion, including ongoing projects that are estimated at $15 billion.
In Ethiopia, around 305 Saudi investors obtained licenses in a period of ten years, to implement 141 projects in the field of agricultural and livestock production and 64 other projects in the industrial sector.
According to the study, the UAE is the fourth largest global investor in Africa, after China, Europe and the United States, respectively, and the top Gulf investor in the continent, with investments reaching $25 billion between 2014 and 2018.
Those projects cover airlines, construction and investment funds.
The Abu Dhabi Fund for Development was at the forefront of investment and financing activity in Africa, as it financed more than 66 projects in 28 African states, with a value of $16.6 billion in 2018. The Fund also allocated $50 million to Emirati companies wishing to invest in Chad.