UAE Becomes Africa’s Top Investor Amid Rights Issues

UAE Emerges as Africa’s Leading Investor: $110 Billion Pledged in Transformative Ventures

The United Arab Emirates (UAE) has surpassed big international heavyweights like the UK, France, and China to become the leading investor in new commercial initiatives throughout Africa. A total of $110 billion (£88 billion) in investments were announced by Emirati enterprises between 2019 and 2023, with $72 billion going especially toward renewable energy. The UAE has established itself as a major force in Africa’s green energy industry because to this significant contribution. However, there are differing opinions regarding these investments because of the growing worries about how they would affect environmental norms and labor rights.

China and other countries’ unwillingness to pursue large-scale infrastructure projects on the continent, as well as Western countries’ failure to fulfill their climate funding commitments, are perceived as the reasons behind the UAE’s increasing influence in Africa.
African governments, disappointed by unfulfilled promises from Western countries—such as the $300 billion annually promised at the COP29 climate conference versus the $1.3 trillion they demanded—have turned to the UAE for vital funding, particularly for their energy transitions.

The Emirati investments, particularly in the renewable energy sector, have been welcomed by African leaders desperate for financing. However, there are rising concerns over the UAE’s human rights record, particularly in relation to migrant workers and its continued reliance on hydrocarbons. These factors have raised alarms among activists and analysts, who fear that the UAE’s investments might not prioritize labor rights and environmental protections in the same way that Western companies are expected to.

For instance, the UAE has a history of political influence in North Africa and the Horn of Africa, where it has been accused of fueling conflicts in countries such as Libya and Sudan. The UAE’s leadership is currently seeking to diversify its economy away from oil and gas in spite of these controversies, concentrating on industries like green energy and vital minerals needed for batteries and electric cars. Emirati businesses have long been well-established in Africa, including DP World and Dubai’s Emirates airline. Under the ownership of the Dubai royal family, DP World operates a number of ports throughout the continent and keeps growing. Additionally, Abu Dhabi Ports has managed ports in Angola, Guinea, and Egypt through its involvement.

Another sector seeing heavy Emirati investment is agriculture and telecommunications. Additionally, the UAE has taken action in the environmental markets by buying carbon credits from Tanzanian, Zambian, Liberian, and Zimbabwean forests. The UAE’s entry into Africa’s mining sector has also drawn criticism. Despite having no past mining experience, International Resource Holdings (IRH), a company associated with Sheikh Tahnoon bin Zayed, the national security adviser for Abu Dhabi, made headlines when it paid $1.1 billion for a 51 percent stake in Zambia’s Mopani Copper Mines. Many were taken aback by the agreement, but Zambian officials were pleased by IRH’s pledge to invest in the mine while maintaining employment.

Additionally, concerns have been raised about criminal activities related to the trade, particularly in relation to gold smuggling. A study by the NGO Swiss aid found that there was a 2,569-tonne gap between official gold exports to Dubai from African countries and the actual gold imported by the emirate from Africa between 2012 and 2022, worth $115.3 billion. This raises questions about the transparency and legality of some of the UAE’s business activities in Africa.

Despite these concerns, experts agree that Africa’s need for financial and trade opportunities is significant. Ken Opalo, an associate professor at Georgetown University, notes that while African countries need all the investment they can get, the influx of foreign capital, especially in sectors such as gold trading, brings with it the risk of increased criminal activity. The UAE’s growing investment in Africa reflects its strategic move to play a major role in the continent’s energy and mineral sectors, but the long-term impact on labor rights, environmental standards and crime remains to be seen.