For the size of their home market, UAE companies are involved in a very wide range of sectors across the African continent, from construction and telecoms to banking and ports. The Investment Corporation of Dubai has invested $300m in Dangote Cement; Rani Investment has opened a number of luxury hotels in Mozambique; and Etihad has also bought a 40% stake in Air Seychelles, identifying commercial potential and much needed infrastructure as they go.
A Dubai Chamber of Commerce study undertaken with the Economist Intelligence Unit concluded that financial services, retail, tourism and logistics were the most popular investment targets. It added: "South Africa notwithstanding, the East Africa region is proving the main draw for Gulf investors, with manufacturing in Ethiopia, leisure, retail and tourism in Mozambique and Kenya. Gulf investors have multiple potential modes of FDI entry: co-investment with private equity funds, purchase of private equity businesses, and direct buyouts or minority share acquisition."
Etisalat has been one of the biggest players in African telecoms since buying a 53% stake in Maroc Telecom in 2014 for $53bn. The former is particularly interesting because of its strategy of specifically targeting emerging markets rather than countries with higher average revenue per user banking on their long-term potential to generate commercial value. It operates in 19 countries, including Egypt, Nigeria and 10 other African markets. Last year it sold its Atlantique Telecom subsidiary, which operates in Benin, Central African Republic, Gabon, Cote d'Ivoire, Niger and Togo, plus Ivorian IT service provider Prestige Telecom, to Maroc Telecom for $532m, thereby restructuring its existing holdings.
Investment in African agriculture is motivated at least as much by concerns over food security in the UAE itself, as by commercial interest. The country's population is expected to increase by 50% between 2010 and 2030, but it has little arable land and so is forced to import 90% of its requirements. Most of its neighbours are in the same position and so Africa offers an ideal source of food imports, particularly of staple crops. One of the biggest investors is Al Dahra Holding, which owns plantations and farms in several African countries, including Egypt, South Africa, Morocco and Namibia. It grows fruit, vegetables and dates to supply the UAE itself but also for export to other markets.
Union National Bank and the Abu Dhabi Islamic Bank...