Africa (Commonwealth)_ There are expectations for a financial boom in Africa as the United Arab Emirates has emerged as the biggest supporter of new business ventures in the region. However, there are also worries that the increased investments from the UAE may jeopardize environmental protections and worker rights.
Emirati enterprises announced projects worth a staggering $110 billion between 2019 and 2023. The Financial Times claims that $72 billion of them went toward investments in the field of renewable energy. Be aware that the pledges were twice as valuable as those of French, Chinese, or British corporations.
The three countries were major participants in the past when it comes to infrastructure investments. Nevertheless, numerous attempts to produce the anticipated results were unsuccessful. In addition, the Western governments’ promises of climate money disappointed the African leaders. Rich countries pledged $300 billion a year during the COP29 session in Azerbaijan, while underdeveloped nations called for $1.3 trillion.
The African leaders are applauding the Emiratis’ heightened involvement. However, a number of activists and analysts from throughout the continent have voiced concerns that the UAE’s investments in Africa will be characterized by its inadequate record on migrant worker labor rights, ongoing support for hydrocarbons, and failure to address environmental issues.
African nations desperately need this money for their own energy transitions. According to Ahmed Aboudouh, an associate fellow at the Chatham House think tank, the Emirati investors also fill in the big gaps that the West was unable to. However, he added, they also arrive with little regard for environmental regulations and labor rights.
A significant political force in North Africa and the Horn of Africa for a long time has been the United Arab Emirates. People have accused the Emiratis of inflaming the wars in Sudan and Libya. The UAE government is currently working on diversifying its economy away from oil and gas by focusing on green energy and “critical minerals” like copper, which are required for batteries and electric vehicles.
Early entrants to Africa were the ports and airlines of Dubai. Emirates Airline, based in Dubai, operates flights to 20 African nations. In the meanwhile, Dubai’s royal family owns DP World, which has operated in the area since 2006. With ambitions to construct two more, the business currently oversees six ports. In addition to recently securing concessions in Egypt, the Republic of Congo, and Angola, Abu Dhabi Ports has been managing Kamsar Port in Guinea since 2013.
Maddalena Procopio, a senior policy expert at the European Council on Foreign Relations, told the Financial Times that Angola is now the only nation where both DP World and Abu Dhabi Ports are present. The UAE was not moving away from East Africa, she insisted. She went on to say, “This has to do with the UAE’s growing interest in expanding connectivity with the Americas, particularly Latin America.”
Businesses in the UAE have also made investments in telecoms and agriculture. Sheikh Ahmed Dalmook al-Maktoum, the prince of Dubai, has entered into agreements since 2022 to sell carbon credits from forests that make up 8% of Tanzania, 10% of Liberia, 10% of Zambia, and 5% of Zimbabwe.
Emirati investments are also having an impact on the mining industry. But there are also disadvantages. Illegal gold transportation from Africa to Dubai has increased in recent years. African countries remain hopeful about the investments, nevertheless.
Ken Opalo, an associate professor at Georgetown University, stated that African nations want all the trade and funding they can obtain. However, he cautioned that the attention could potentially incite illicit activity, akin to the gold industry.
Most onlookers were surprised by the arrangement. In 2021, ZCCM acquired the indebted mine from Glencore and had been looking for a new investor. According to numerous reports, the shortlist was down to just two businesses in 2023: Sibanye Stillwater of South Africa and Zijin Mining of China.
According to analysts, the quantity of gold that is unlawfully smuggled into Dubai from Africa has increased. Swissaid, an NGO, discovered a $115.3 billion discrepancy between the emirate’s imports from Africa and its stated exports of 2,569 tons from African nations between 2012 and 2022.
