Wealthy Gulf states are pouring billions of dollars into African countries, but each nation has different objectives. What drives these investments, and what do African countries gain?

Just days ago, ADNOC Distribution, a petroleum retailer in Abu Dhabi, announced it would acquire Shell's petrol stations and fuel business in South Africa for an estimated $1 billion. This deal secures Abu Dhabi's foothold in Africa's fuel market.

This billion-dollar deal is part of a larger trend. According to Chatham House, Gulf Cooperation Council (GCC) states have invested over $100 billion in Africa over the past decade, with the UAE contributing $59 billion and Saudi Arabia $26 billion.

Experts say the main reason for this shift is the Gulf states' need to diversify away from hydrocarbons and strengthen their economic projection. They see Africa as a vast potential market for new sectors.

Investments focus on energy, ports, logistics, agriculture, and critical raw materials. These secure trade routes, enhance food security, and ensure access to copper, cobalt, and lithium needed for electric vehicles and AI.

The UAE and Saudi Arabia invest mainly in renewable energy and petroleum processing, while Qatar focuses on selective economic cooperation. The UAE's economic engagement is closely tied to its foreign policy and security goals, aiming to project power and challenge Saudi Arabia's regional standing.

For African nations, Gulf investment comes at a good time as Western development aid shrinks and Chinese loans decline. However, experts warn that these investments may create new dependencies, as they are concentrated on strategic infrastructure and raw material exports rather than fostering industrialization and long-term growth.

Source: www.dw.com