The United Arab Emirates, Saudi Arabia, and Qatar have poured billions into developing airports, airlines, and seaports in East Africa over the past decade. These investments are turning the region into a key hub for global trade, tourism, and travel.
Massive investment by Gulf States in East Africa
Over the past ten years, economic ties between Gulf Cooperation Council (GCC) countries and East Africa have deepened significantly, driven by strategic investments in key infrastructure.
Emerging economic relations between Africa and the GCC, comprising the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman are set for significant growth. Last year, GCC companies announced 73 foreign direct investment (FDI) projects in Africa, totaling over 53 billion USD.
Gulf countries such as Saudi Arabia, Qatar and the United Arab Emirates (UAE) have invested billions in East African development:
- From airlines
- Seaports
- Airports
These investments are transforming the region, improving connectivity while promoting economic growth.
Contribution to the development of the aeronautics industry in East Africa
The United Arab Emirates is leading investment in East Africa’s aviation industry. Recently, the UAE Sharjah Chamber of Commerce and Industry signed an agreement with Uganda to construct a new international airport near Kidepo National Park, close to the Kenyan border.
This strategic location aims to boost tourism by providing direct access to the 1,442 square kilometer park, famous for its diverse wildlife. President Yoweri Museveni highlights this investment as a testament to the UAE’s expanding economic influence in East Africa.
This landmark financing coincides with Dubai Airports and Emirates Airlines enhancing connectivity between the Gulf States and Africa. Emirates Airline has expanded its routes to key East African cities like Nairobi, Addis Ababa, and Dar es Salaam. These routes boost tourism, business travel, and freight traffic, significantly benefiting international trade.
Qatar’s expansion in aviation
Qatar Airways is bolstering its presence in East Africa with new routes and increased flight frequencies to cities like Kigali, Nairobi, and Zanzibar. This strategic expansion from its Doha hub not only enhances regional connectivity but also solidifies Qatar’s position as a key player in East Africa’s aviation sector.
Beyond flights, Qatar is investing in airport infrastructure across the region. In 2019, Qatar Airways unveiled plans to invest in Rwanda’s new Bugesera International Airport, a 1.3 billion USD project aimed at creating a state-of-the-art facility capable of handling up to 7 million passengers annually.
Over the past 12 months, Qatar Airways, based in Doha, has been negotiating an agreement with RwandAir to acquire up to 49 % of the national airline based in Kigali. According to RwandAir CEO Yvonne Makolo, « the discussions have been ongoing for nearly five years, and they have recently finalized an agreement set to conclude by early July this year », as reported by the Financial Times.
Saudi Arabia’s strategic investments
Over the past decade, Saudi Arabia has significantly expanded its presence in the East African aviation sector. Saudia, the national airline, has ramped up flight frequencies to cities like Nairobi, Addis Ababa, and Khartoum, linking them with major destinations in the Middle East. This enhanced connectivity has catalyzed tourism, trade, and cultural exchanges between these regions.
Moreover, Saudi Arabia is actively investing in airport infrastructure through its sovereign wealth fund, the Public Investment Fund (PIF). In 2018, the PIF forged a partnership with the Ethiopian government aimed at advancing the country’s aviation capabilities. This collaboration includes the modernization of Addis Ababa’s Bole International Airport, positioning it as a pivotal air transport hub in Africa.
UAE Leads Development of East African Seaports
The United Arab Emirates, particularly through Dubai Ports World (DP World), is pivotal in the expansion of seaports across East Africa. DP World manages critical ports in the region, such as Berbera in Somaliland, Bosaso in Puntland, and the Doraleh container terminal in Djibouti. Recently, the group inked a deal to develop and oversee multiple berths at the port of Dar es Salaam.
The development of the port of Berbera, in particular, has been transformative. DP World signed a 442 million USD agreement with Somaliland to develop and manage the port as part of a package including:
- Construction of a new container terminal
- Expansion of existing facilities
This development has positioned Berbera as a crucial trade gateway between East Africa and the Gulf, bolstering the region’s trade capabilities and diversifying routes away from traditional pathways via Djibouti.
Saudi Arabia’s port investments
Saudi Arabia is advancing in the development of East African ports through initiatives led by the Saudi Ports Authority (Mawani). Notably, in 2020, Saudi Arabia committed 100 million USD to enhance Port Sudan in Sudan, aiming to modernize infrastructure and boost operational efficiency.
This investment is integral to Saudi Arabia’s broader strategy to optimize trade routes and secure access to vital maritime hubs. By upgrading East African port facilities, Saudi Arabia aims to facilitate seamless trade flows and fortify economic relationships within the region.
Qatar’s maritime ambitions
Qatar recognizes the strategic importance of East African seaports. The Qatar Ports Management Company (Mwani Qatar) is already actively exploring investments with Somalia to develop the port of Hobyo. This investment will boost trade between Somalia and the Gulf, providing a vital artery for the movement of goods and services.
Qatar’s investments in East African seaports form a key component of its strategy to diversify its economy and enhance global trade networks. Through the development of port infrastructure in the region, Qatar is establishing itself as a significant player along maritime trade routes that connect Africa, the Gulf, and beyond.
Africa – Gulf : Emerging economic partnership
Over the last decade, GCC countries have collectively invested more than 100 billion USD in Africa. The United Arab Emirates led with investments totaling 59.4 billion USD, followed by Saudi Arabia with 25.6 billion USD and Qatar with 7.2 billion USD. During this period, the UAE ranked as the fourth largest foreign direct investor in Africa, following China, the EU, and the USA.
Africa faces a significant infrastructure financing gap of 150 billion USD, as reported by the Africa Finance Corporation. According to UNCTAD’s World Investment Report, foreign direct investment (FDI) flows into Africa plummeted to 45 billion USD in 2022, down from a peak of 80 billion USD in 2021.
Furthermore, China’s investments and loans in Africa have notably decreased in recent years.
New era for trade and investment
Over the last decade, trade between the United Arab Emirates and sub-Saharan Africa has grown by over 30 %, reflecting increased imports and exports. Similarly, Saudi Arabia’s trade with sub-Saharan Africa has surged, now twelve times greater than a decade ago.
The African Continental Free Trade Area (AfCFTA), launched in 2021, is accelerating this trend by providing GCC companies access to a unified African market. Encompassing 1.7 billion people by 2030, AfCFTA’s establishment of a single market is expected to enhance international exports and intra-African trade through preferential trade agreements.
Conclusion : Economic impact and outlook
Investments by Gulf countries in East Africa’s infrastructure are significantly impacting the region’s economy. Enhanced airport and port facilities have improved connectivity, facilitating easier business operations and trade. This influx of infrastructure investment has attracted more foreign direct investment (FDI), fueling economic growth and development.
For instance, expanded airport facilities are driving tourism growth, a vital revenue source for East African nations. Improved connectivity also provides businesses with streamlined access to global markets, boosting exports and job creation.
Furthermore, Gulf States’ investments in transport infrastructure are fostering regional integration across East Africa. Improved connectivity between countries is enhancing intra-regional trade and facilitating the movement of people. This development is particularly beneficial for landlocked nations like Ethiopia and Rwanda, which rely on neighboring ports for international market access.
Moreover, these investments are catalyzing the expansion of regional trade corridors such as the Port of Lamu-Southern Sudan-Ethiopia Transport Corridor (LAPSSET). Supported by UAE and other Gulf investments, this initiative aims to establish a new trade route connecting the Indian Ocean to East Africa’s interior, promoting economic integration and regional development.
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