Since 2013, China has spearheaded an infrastructure development surge across Africa through its Belt and Road Initiative (BRI). Nevertheless, the economic downturn caused by the Covid-19 pandemic has prompted China to reevaluate and reduce funding for many of its African projects.
However, a new, benevolent investor seems to be following China's lead. Over the past few years, the United Arab Emirates (UAE) has expanded its investment presence in Africa, particularly in the realm of infrastructure, with a significant focus on the port sector.
In 2021, the UAE marked its 50th founding anniversary, accompanied by the launch of the 'Principles of the 50' document, outlining the UAE's development path for the next half-century. A central element of this approach is a renewed foreign policy that prioritizes the Emirate's economic interests.
This renewed foreign policy drive is evident in the substantial deals that Emirati companies are forging in Africa. Thanks to their substantial investments in port projects, the UAE has now become the fourth-largest investor in Africa, trailing only behind China, Europe, and the United States.
Dubai-based DP World and Abu Dhabi's AD Ports, both owned by Emirati royal families, have significantly expanded their influence in African ports over the past decade. For instance, as of 2021, Africa accounted for 10 percent of DP World's revenue, owing to major port operations in seven African nations at that time.
This share has undoubtedly risen further after DP World's acquisition of South Africa-based Imperial Logistics. With Imperial Logistics being a leading transport company serving 26 African and European countries, this acquisition solidified DP World's position as a 'Gateway to Africa.'
Simultaneously, AD Ports made its inaugural international acquisition last year by purchasing a controlling stake in Egypt's Transmar Shipping and Transcargo International Company (TCI). This deal granted AD Ports a dominant market position in port operations in North Africa and the Red Sea region.
As of now, DP World and AD Ports Groups collectively operate 12 port facilities in Africa, including a logistics platform in land-locked Rwanda. These port operations in Africa are structured through port concessions that typically span over 20 years, making the UAE a formidable competitor to China in vying for port concessions on the African continent.
'This string of ports strategy allows the UAE to access African economies and markets, with the Jebel Ali Port in Dubai serving as a super hub connecting Africa and Asia. It embodies a One Port, One Node Strategy, with each African port serving as a node linking the Gulf with Africa,' explains Eleonara Ardemagni, a Senior Research Fellow at the Italian Institute for International Political Studies.
But what sets the UAE's approach to African development apart from that of other foreign players?
One notable distinction lies in how the UAE has cultivated its Emirati brand in Africa, using port investments as its primary sphere of influence. UAE's African policy appears to hinge on ports as pivotal nodes of influence.
In certain cases, UAE's maritime ambitions in Africa predate China's involvement. Consider the instance of Maputo Port in Mozambique, which DP World has managed since 2006, while China only began working with Mozambique to revamp Beira Port in 2017. Similarly, DP World has overseen operations at the Port of Dakar in Senegal since 2008, whereas China's infrastructure projects in the country began to materialise in 2018, a full decade later.