In recent years, Middle Eastern investors have significantly increased their foreign direct investment (FDI) announcements in Africa, particularly in greenfield areas. This surge is attributed to ambitious plans for renewable energy production, including green hydrogen, as well as infrastructure development such as ports, warehouses, and data centers.
According to the latest data from FDI Markets, companies from the Gulf states unveiled 73 FDI projects in Africa, totaling over $53 billion in investment last year. The only year surpassing this figure was 2022, with $60 billion pledged across 83 projects. Notably, over 90% of this FDI originated from the UAE and Saudi Arabia, focusing primarily on hydrogen and other renewable energy ventures, reports Al-Qabas daily.
This substantial increase reflects the Gulf countries’ strategic shift away from reliance on oil and gas towards supporting emerging technologies. Green hydrogen, in particular, is recognized as crucial for decarbonizing industries like shipping and steel, although its full implementation is still on the horizon.
In addition to diversification efforts, Gulf Cooperation Council (GCC) countries, except Saudi Arabia, have established bilateral investment treaties with African nations. These agreements facilitate cross-border investments across various sectors, such as digital infrastructure and ports, capitalizing on anticipated growth opportunities in the region.