Why the Gulf Countries Are Investing Billions in Africa

The United Arab Emirates has secured a major foothold in Africa’s energy sector with the acquisition of Shell’s fuel distribution business in South Africa for approximately one billion U.S. dollars. The deal, announced recently, marks the latest step in a broader strategy by Gulf Cooperation Council (GCC) states to expand their economic influence across the continent. This move underscores a growing trend of substantial investment by Gulf nations into African markets, spanning multiple sectors beyond just oil and gas. Over the past decade, GCC countries have collectively invested more than $100 billion in Africa, according to analyses by institutions including the Chatham House, the Brookings Institution, and the African Development Bank. Of this total, the UAE alone contributed around $59 billion, while Saudi Arabia accounted for nearly $26 billion. These investments reflect a strategic effort to diversify economies traditionally reliant on hydrocarbons and secure long-term access to critical resources and markets. The UAE's recent acquisition of Shell’s operations in South Africa exemplifies this approach. By acquiring a key player in the region’s largest fuel market, Abu Dhabi aims to strengthen its position in the continent’s energy supply chain. The transaction highlights the UAE’s focus on securing infrastructure and logistics networks that support both energy exports and broader economic engagement. Experts suggest that the Gulf states view Africa not merely as a distant market but as a vital regional partner. According to Dr. Stephan Roll of the Berlin-based Foundation for Science and Politics, the region holds strategic importance due to its location along crucial trade routes and longstanding economic ties. He notes that the increasing presence of Gulf investors in Africa is neither surprising nor new, given these factors. Dr. Maddalena Procopio of the European Council on Foreign Relations adds that the primary goal for many Gulf nations is to reduce dependency on fossil fuels by developing alternative revenue streams. As part of this effort, they are increasingly looking toward Africa as a potential growth area, particularly in sectors such as renewable energy, agriculture, and mining. Investment priorities vary among the Gulf states. While the UAE focuses heavily on renewable energy projects and refining capabilities, Saudi Arabia emphasizes energy-related ventures alongside development financing through institutions like the Islamic Development Bank. Qatar, meanwhile, maintains a more selective approach to its involvement in African markets. The UAE appears to be adopting a multifaceted strategy that integrates economic interests with foreign policy objectives. Dr. Roll explains that the country’s efforts extend beyond mere commerce, incorporating elements of geopolitical influence through control over strategic ports and logistical hubs. This integration of economic and political goals is evident in the UAE’s emphasis on port infrastructure and trade corridors. Saudi Arabia, on the other hand, adopts a more targeted approach, concentrating on specific sectors such as energy and development assistance. Despite its significant financial contributions, the kingdom does not appear to be directly competing with the UAE in terms of scale or ambition, according to Dr. Roll. The overall pattern suggests that Gulf investments in Africa are driven by a combination of economic necessity, strategic positioning, and long-term planning. With continued interest in securing access to essential commodities and expanding trade networks, the Gulf states are likely to maintain and possibly increase their level of engagement in the continent.