The Cost of the Gulf’s Booming Business in Africa

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In 2023 alone, Gulf states made investment pledges worth over $53 billion—almost four times more than the U.S.

Khalid bin Saleh Al Mudaifer, Saudi Arabia's deputy minister for mining, speaks on the opening day of the Investing in African Mining Indaba in Cape Town, South Africa, on Monday, Feb. 6, 2023.Ricardo Soares de Oliveira is a professor of politics at the University of Oxford and is currently writing a book title. Convened by Crown Prince Mohammed bin Salman, it brought together a mélange of democrats and dictators, reformers and kleptocrats, young go-getters and long-ruling dinosaurs.

In some ways the oft-repeated Scramble-for-Africa metaphor doesn’t fit the new Gulf-Africa relations. Unlike during the colonial onslaught that took place in the late 19th century, African governments exercise plenty of agency as they forge international relationships. Instead of sending soldiers and laying claim to natural resources, outside powers are investing huge sums across Africa.

The balance sheet of Gulf-Africa relations is a complex one. On the upside, Gulf states provide African countries with investment flows—especially in key areas like energy and infrastructure—that can help modernize their economies. Its financial centers have become an indispensable platform to service African firms as well as major foreign investors. Dubai, deemed “—are a major source of interregional financial flows.

 

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