The United Arab Emirates has become the biggest supporter of new business projects in Africa, raising hopes of an influx of needed green energy funding, but there are concerns that investments could undermine labor rights and environmental protections. There are also concerns that there may be.
Between 2019 and 2023, Emirati companies announced $110bn (£88bn) of projects, of which $72bn was related to renewable energy, according to data firm FT Locations, part of the Financial Times.
The pledge was more than double the amount pledged by British, French and Chinese companies who pulled out of big-ticket infrastructure projects in Africa after many projects failed to achieve expected returns. African leaders were also disappointed with climate finance promises made by Western governments. For example, at the Cop29 climate change conference, rich countries pledged $300 billion a year, while developing countries asked for $1.3 trillion.
While African leaders have welcomed the increased interest from the emirates, some activists and analysts have criticized the UAE’s poor record on labor rights for migrant workers and its continued commitment to hydrocarbons. They are concerned that investment in Africa will be characterized by failures to support and address environmental issues.
“African countries desperately need this funding for their energy transitions, and Emirati investors are plugging the gaping hole where the West has failed,” said think tank Chatham. said Ahmed Abdou, an associate fellow at the House. “But at the same time, they come in without much concern for worker rights or environmental standards.”
The UAE has long played a political role in North Africa and the Horn of Africa, and has been accused of fueling conflicts in Libya and Sudan. The country’s leaders are now looking to diversify the economy away from oil and gas, into green energy and “critical minerals” such as copper needed for electric cars and batteries.
Dubai’s ports and airlines were early entrants to Africa. Dubai’s Emirates Airlines flies to 20 African countries. DP World, managed by the Dubai Royal Family, has been based in the region since 2006. The company manages six ports and has plans to build two more. Abu Dhabi Ports has been managing Guinea’s Kamsar Port since 2013 and has recently acquired concessions in Egypt, the Republic of Congo and Angola.
“Angola is currently the only country with both DP World and Abu Dhabi ports,” said Maddalena Procopio, a senior policy researcher at the European Council on Foreign Relations. He said the UAE has not left East Africa. “This is linked to the UAE’s growing interest in expanding connectivity to the Americas, especially Latin America.”
UAE companies are also investing in agriculture and telecommunications sectors. From 2022, Dubai Royal Sheikh Ahmed Dalmook Al Maktoum has a deal to sell carbon credits from forests covering a fifth of Zimbabwe, 10% of Liberia, 10% of Zambia and 8% of Tanzania. tied.
Emirati investment has also had a jolt in the mining industry. International Resources Holdings, part of a conglomerate controlled by Abu Dhabi’s national security adviser Sheikh Tahnoun bin Zayed, paid Zambia’s state-run mining company ZCCM $1.1 billion to acquire the Mopani copper mine. Acquired 51% stock.
The deal came as a surprise to most parties. ZCCM took over the debt-ridden mine from Glencore in 2021 and was looking for new investors. Throughout 2023, it was widely reported that the finalists had been narrowed down to two companies: China’s Zijin Mining and South Africa’s Sibanye Stillwater.
That was until IRH was announced as the preferred bidder. Sheikh Tahnoun’s company, often referred to as the second most powerful emirate after Abu Dhabi’s ruler Sheikh Mohammed bin Zayed Al Nahyan, had no track record. But Zambian officials and advisers said IRH employs world-class mining experts and the mine’s pledge to invest in the mine while retaining jobs was the best option.
Many of Emirates’ announcements may never fully materialize or are still in the early stages. For example, the 2023 announcement of a $34 billion “green hydrogen” project in Mauritania was a memorandum of understanding, not a contract.
Some pledges have hit hurdles. In January 2023, renewable energy company Masdar announced it would invest $2 billion in 2GW of solar power in Zambia. However, Zambia’s special assistant to the president, Zito Kayumba, said the investment was delayed due to financial problems at state-owned energy company ZESCO.
Meanwhile, the amount of gold illegally smuggled into Dubai from Africa is increasing, according to researchers. NGO Swissuid found that between 2012 and 2022, the difference between official exports from African countries to emirates and imports from Africa was 2,569 tonnes, worth $115.3 billion.
“African countries need all the credit and trade they can get,” said Ken Oparo, an associate professor at Georgetown University. “But attention can also breed crime, as we have seen in the gold sector.”
