The Middle East, particularly the Gulf Cooperation Council (GCC), has forged strong ties with countries across Africa and in crucial industries such as agriculture, healthcare and energy.
This positive outlook builds on years of strong relations between the two regions. Indeed, a recent Dubai Chamber of Commerce report showed that the UAE accounted for 88 per cent of investment from the GCC to sub-Sahara Africa.
Saudi Arabia is also a big investor in Africa’s agrobusiness – particularly tapping the massive potential of East African farmlands to address critical issues such as food security. The kingdom’s sovereign wealth fund has invested around $4 billion (Dh14.7 billion) in a variety of sectors across Africa, including mining, telecoms and energy.
In South Africa, which is also known as the gateway to Africa in business terms, the South African National Treasury noted real GDP growth bounced back to 4.9 per cent in 2021. This was driven primarily by a combination of base effects, strong commodity prices, and the gradual reopening of the economy after tight Covid-19 restrictions.
Energy, water and food security remain topical, as well as transportation, in the economic growth of South Africa and broader sub-Saharan Africa, in which there is huge potential. As noted by Standard Bank and the South African SOCs, the world's top 300 investment firms have total assets slightly north of $50 trillion, yet only 3 per cent investment in Africa.
It is also important to note the ever-growing interest from investors to deploy capital to industries in Africa such as mining, tourism, healthcare and financial services.
Household income in Africa has been on the rise, pushing the demand up for banking services. Because of Africa’s young demographic make-up, demand for digital and mobile solutions (financial technology) is also proving to be a promising investment opportunity for Gulf investors and we remain optimistic.
The writer is the Executive Head – Sovereign and Public Sector, Corporate and Investment Banking at Standard Bank
