How the UAE is competing with China for Africa’s resources

With more than US$97 billion pledged, the UAE’s economic strategy is up against China’s ambitions – while the US and EU also seek influence

Reading Time:4 minutes

The UAE flag in front of the Dubai International Financial Centre in Dubai. Photo: Reuters

Published: 5:30pm, 14 Sep 2024

Middle Eastern commercial powerhouse the United Arab Emirates is fast emerging as China’s most formidable competitor in Africa. By harnessing its financial resources, economy-first diplomacy, and world-class logistical networks, the UAE looks poised to capitalise on opportunities largely created by decades of Chinese investment on the continent.

Having overtaken both China and Western nations as Africa’s largest foreign direct investor – committing more than US$97 billion in 2022 and 2023 – the UAE is strategically positioned to compete with and collaborate alongside Beijing, as well as its Western and Asian adversaries, analysts say.

With foreign investments in Africa falling short of the continent’s development needs by an estimated US$130 billion to US$170 billion annually, there is significant potential for both Chinese and Gulf investments to “coexist and thrive”, said Albert Vidal Ribé, a Bahrain-based research analyst at the International Institute for Strategic Studies.

Given this, the UAE and other Gulf monarchies, like Saudi Arabia, are unlikely to “feel threatened” by China’s recent pledge to boost its investments in Africa by US$51 billion over the next three years, Ribé told This Week In Asia.

Beijing “doesn’t always deliver on its grandiose pledges”, he said, suggesting that Chinese investments in infrastructure and energy could “expand the pie by boosting economic development, creating new opportunities that the Arab Gulf states could tap into”.

China’s plan to invest in a railway linking mineral-rich Zambia to the Indian Ocean port of Dar es Salaam in Tanzania, for example, will benefit both Chinese and UAE mining interests by facilitating the transport of the resources.