Gulf capital fills Africa infrastructure gap
Gulf investors are investing billions of dollars in Africa’s ports, transport corridors, logistics, renewable energy, and critical minerals. Governments across the continent seek new sources of long-term development finance. This shift gained momentum in June, when sovereign wealth funds, commercial banks, development finance institutions, institutional investors, and corporate issuers launched the Africa–Middle East Corridor. Debuted during the Global Banking & Markets Middle East 2026 conference in Dubai, the initiative aims to mobilize capital for infrastructure, deepen Africa’s debt capital markets, and expand cross-border investment between the Gulf and Africa.
The launch comes at a critical moment for the continent. The African Development Bank states Africa requires approximately $170 billion annually to finance infrastructure, yet current investment totals only $80 billion to $90 billion.
Gulf capital fills the gap left by China’s retreat
For nearly two decades, Chinese policy banks financed much of Africa’s modern infrastructure expansion, underwriting railways, highways, ports, airports and power projects. Yet, according to the Boston University Global Development Policy Center, Chinese policy bank lending fell from a peak of $28.8 billion in 2016 to $2.1 billion in 2024. Annual lending regularly exceeded $10 billion between 2012 and 2018, but Beijing has increasingly pivoted from sovereign-backed megaprojects to smaller, commercially driven investments.
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That retreat has created space for Gulf sovereign wealth funds, export credit agencies, and commercial banks to expand their presence. Investors from Gulf Cooperation Council countries announced 73 foreign direct investment projects worth more than $53 billion across Africa in 2023, reflecting a decisive shift toward fewer but significantly larger investments concentrated in renewable energy, logistics, critical minerals, transport and digital infrastructure.
The United Arab Emirates has emerged as Africa’s fourth-largest foreign investor. Between 2019 and 2023, Emirati investments exceeded $110 billion, including an estimated $70 billion directed at renewable energy.
Several flagship transactions illustrate the scale of that commitment. ADQ’s $35 billion Ras El-Hekma development in Egypt ranks among the largest FDI deals ever concluded on the continent. DP World now operates six African ports and logistics facilities, while Abu Dhabi Ports has secured concessions in Egypt, Angola, and the Republic of Congo, strengthening Gulf influence over strategic maritime trade routes linking Africa with Europe, Asia, and the Middle East.
For African governments, the shift represents more than a simple replacement of one source of capital with another. Gulf investors tend to favor joint ventures and long-term concessions rather than the loan-based model China used, which means host countries retain more ownership of projects. That dynamic could give African states greater control over how their infrastructure is built and operated — but it also demands stronger regulatory frameworks and negotiating capacity than many governments currently have.
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Renewable energy and critical minerals lead the charge
Masdar, Abu Dhabi’s state-owned renewable energy company, has committed $10 billion to develop 10 gigawatts of renewable energy capacity across sub-Saharan Africa by 2030. Infinity Power, a joint venture between Masdar and Egypt’s Infinity, is now Africa’s largest pure-play renewable energy company, operating 1.3GW of generation capacity in Egypt, South Africa, and Senegal, with a further 16GW under development. Saudi Arabia’s ACWA Power continues to expand its renewable energy portfolio in Morocco, Egypt, and South Africa, while Gulf investors are increasingly financing green hydrogen, battery storage, and electricity transmission projects across the continent.
Commercial banks are also increasing their African presence. In March, First Abu Dhabi Bank announced plans to establish its first representative office in Lagos, making Nigeria its West African hub. The lender has already participated in financing the $1.13 billion Lagos–Calabar Coastal Highway, signaling growing Gulf interest in African project finance and structured lending.
“Gulf capital is increasingly vital to Africa because of a strategic alignment of economic needs,” says Phumlani Majozi, senior economist and executive director at the African Markets Institute. “As traditional Western and Chinese funding slows, African countries require enormous investment for infrastructure, energy, and digital transformation, while Gulf states are actively diversifying beyond hydrocarbons. The relationship is evolving from aid-based engagement into long-term commercial integration.”
Trade ties deepen as Africa strengthens its hand
The African Continental Free Trade Area is creating a $3.4 trillion integrated market spanning 54 economies. The continent controls roughly 30% of the world’s critical minerals, including copper, cobalt, lithium, and manganese — resources central to the global energy transition. Individual countries are strengthening their ties across the regions as well. Kenya’s full economic partnership agreement with the UAE, signed in January 2025, was the first such deal between the UAE and a mainland African country. The accord improves business access to both countries’ markets by expanding investment protection and providing a framework for deeper cooperation in trade, logistics, financial services and digital commerce.
“Africa’s leverage has never been stronger,” Majozi argues. “The continent possesses roughly 30% of the world’s critical minerals, the world’s youngest workforce and the AfCFTA’s $3.4 trillion integrated market. The challenge is converting that structural advantage into negotiating power.”
Private-sector advisers see the relationship as rooted in geography and commercial history. “The Middle East is Africa’s closest neighbor. Trade between the two regions stretches back thousands of years,” said Jacqueléne Coetzer, founder and CEO of Jacqueléne Global Consulting. “Africa and the Gulf do not need to discover entirely new markets; they need to rediscover one another.” Gulf investors are targeting critical minerals in the Democratic Republic of Congo and Zambia, agriculture in Ethiopia, renewable energy in Kenya and South Africa, logistics in Egypt and Nigeria, and financial services through Mauritius, Coetzer says.
If the Africa–Middle East Corridor succeeds in converting investment commitments into bankable projects, it could become one of the principal channels through which Gulf capital finances Africa’s next generation of infrastructure, industrialization, and capital-market development.
