GCC Investments in African Ports and Airports: A Strategic Play for Trade Dominance

Growing Gulf Presence in African Infrastructure

In recent years, Gulf countries have ramped up investments in Africa’s ports and airports, driven by the strategic goal of controlling vital trade routes and enhancing economic influence. These projects underscore the importance of Africa’s logistics hubs in connecting the continent to the Middle East, Asia, and beyond.

Port Development: Securing Key Trade Nodes

The UAE, through DP World, has been a major player in transforming African port infrastructure. Noteworthy projects include:

• Berbera Port, Somaliland

• Doraleh Terminal, Djibouti

• Dar es Salaam Port, Tanzania

These ports have become key trade nodes, linking African markets to Gulf and Asian economies. Saudi Arabia has also made significant strides, with its modernization of Port Sudan in Sudan, while Qatar has invested in the development of Somalia’s Hobyo Port.

Aviation Expansion: Connecting African Skies

Gulf countries are also eyeing the aviation sector. Qatar Airways has invested $1.3 billion in Bugesera International Airport in Rwanda and acquired a stake in RwandAir. Meanwhile, Saudi Arabia’s Public Investment Fund has partnered with Ethiopia to expand Addis Ababa’s Bole International Airport. These projects aim to secure the Gulf’s position in Africa’s growing aviation sector.

Transparency and Governance: The Path to Long-Term Success

For Africa to fully benefit from these investments, transparency, clear governance, and anti-corruption measures are essential. Strategic infrastructure concessions like these can be game-changers for African economic development, but only if managed with accountability and fairness.

Key GCC Infrastructure Projects in Africa:

• Berbera Port, Somaliland (DP World)

• Doraleh Terminal, Djibouti (DP World)

• Dar es Salaam Port, Tanzania (DP World)

• Port Sudan, Sudan (Saudi Arabia)

• Hobyo Port, Somalia (Qatar)

Source: Economist Intelligence Unit, 2024

Other Key Areas for Major Investments in Africa

In addition to port and airport concessions, the next major area of investment for Gulf countries in Africa is likely to be renewable energy. Africa's vast and largely untapped potential in solar, wind, and even green hydrogen presents an attractive opportunity for Gulf states, especially as they seek to diversify their economies and take a lead in the global energy transition.

Here’s why renewable energy is a promising investment focus:

• Abundant Resources: Africa is rich in renewable energy sources. The Sahel, North Africa, and East Africa have immense solar potential, while coastal regions like Kenya and South Africa offer strong wind resources. This provides a natural fit for countries like the UAE and Saudi Arabia, who have already invested significantly in solar and wind power.

• Rising Energy Demand: Africa’s rapidly growing population and industrialization efforts are driving a surge in energy demand. Yet, many countries on the continent face significant energy shortfalls. Gulf countries can help bridge this gap by investing in large-scale renewable energy projects, contributing to both Africa's energy security and global climate change goals.

• Strategic Economic Diversification: For Gulf states, particularly the UAE and Saudi Arabia, Africa offers a key market for expanding renewable energy portfolios. By shifting from a reliance on fossil fuels to clean energy, they can ensure long-term economic stability while contributing to the continent's development. These investments also align with their broader goals of becoming global leaders in renewable energy innovation.

  
  

As Gulf nations continue to strengthen ties with Africa, renewable energy projects represent an area with immense potential for mutual economic and environmental benefits.