War in Iran and US tariffs are destabilizing global trade. But commerce hasn’t slowed; it’s simply rerouting.
As last fall’s G20 summit closed in Johannesburg, the United Arab Emirates announced plans to inject up to $1 billion in AI infrastructure funding across Africa. The pledge is the latest in a growing wave of investment from the Gulf Cooperation Council states that signals a broader shift.
Together, the Middle East and Africa represent roughly 2 billion consumers and a combined GDP of more than $5 trillion. Investment and trade spanning the regions are already accelerating. GCC countries have deployed over $100 billion in Africa and bilateral trade grew at an annual rate of about 8% between 2021 and 2022, reaching $154 billion.
Europe and China remain the continent’s largest capital providers, but the Gulf states are closing the gap. As war, supply-chain disruptions, and new US tariffs reshape global trade, countries across the MENA region see an opportunity to position themselves as the logistical and financial bridge linking Asia, Europe, and Africa.
Gateways And Corridors
The two natural points of entry are Egypt and Morocco. They have a foot in both regions and long experience navigating between the Arab world and the African continent.
Egypt acts as a gateway to East Africa, with commercial routes extending toward Sudan, Kenya, and Uganda. Morocco has established itself as a hub for west Africa, leveraging decades of political and economic ties with francophone markets. Businesses from both countries are expanding across the continent in sectors including food processing, manufacturing, pharmaceuticals, chemicals, telecoms, and technology.
Over the past decade, the Gulf states have also steadily expanded their presence, deploying capital through longterm strategic investments to reshape Africa’s trade routes while securing access to land, natural resources, and fast-growing markets.
Gulf investors are targeting corridors along the Red Sea and the Horn of Africa, including the Berbera–Ethiopia trade route and points of access to the Indian Ocean, the Atlantic, and the Mediterranean. Their aim is to anchor supply chains that direct African trade through Gulf logistics hubs before it reaches global markets.
“The GCC is becoming more and more of a trade hub for Africa,” says Tarek El Nahas, group head of International Banking at Dubai-headquartered Mashreq Bank. “We’ve got a lot of clients that have their regional operations here for both Middle East and Africa.”
Infrastructure is central to these developments. The UAE and Saudi Arabia are investing heavily in ports, logistics hubs, and industrial zones, laying the foundations for new Global South supply chains.
The UAE is by far Africa’s largest Gulf stakeholder. Dubai’s DP World and Abu Dhabi Ports have secured concessions to operate and develop ports in Algeria, Egypt, Somalia, Somaliland, Tanzania, South Africa, Guinea, Senegal, Sudan, the Democratic Republic of Congo, Mozambique, Congo-Brazzaville, Eritrea, Rwanda, and Niger.
Air connections are also an investment target, with Qatar Airways supporting several African airlines including South Africa’s Airlink while Doha in 2019 acquired 60% of Rwanda’s new international airport.
Telecom operators such as Qatar’s Ooredoo and the UAE’s e& (formerly Etisalat) support cable infrastructure and data centers and have signed partnerships with local providers like Maroc Telecom as part of a plan to reach several dozen countries across the continent by 2030.
In light of the recent Iranian attacks on GCC infrastructure, UAE and Saudi Arabia are also considering shifting some AI assets to secure locations in Africa. Abu Dhabi’s G42 is already building a $1 billion data center in Kenya.
Commodities, Food, And Energy
What, then, are these closely connected regions trading? Exchange often begins with natural resources.
Oil and gas dominate Gulf exports to Africa, while the continent supplies metals. Gold is a major African export to the UAE, already a hub for precious metals and stones; Gulf investors are also targeting rare metals and minerals critical to energy transition and AI supply chains.
Deal activity reflects this shift. Last year, Abu Dhabi-based International Resources Holding acquired 51% of Zambia’s Mopani Copper Mines for $1.1 billion. Saudi Arabia’s Maaden Holding, through Manara Minerals, is pursuing similar deals in Zambia and elsewhere.
These ventures sometimes feed Western markets. In November, the US and Saudi Arabia agreed to cooperate on mineral supplies to reduce reliance on China, and in March, US-based Cove Capital and Saudi Arabia’s AHQ announced a “multibillion dollar” fund to invest in African minerals including cobalt, copper, lithium, and rare earths.
Renewable energy is another focus. The UAE’s Masdar has committed $10 billion to African clean energy projects by 2030, backing solar projects in Angola, Uganda, Zambia, and Mozambique. Late last year, Saudi Arabia’s Acwa Power signed a deal with the African Development Bank to invest up to $5 billion in renewable energy and water systems in countries including South Africa, Egypt, and Morocco.
Food security is also a major driver for GCC countries, which buy over 80% of their comestibles from abroad. The UAE and Saudi Arabia import agricultural products and livestock from across Africa while investing in farmland and production projects to secure long-term supply. Qatar has made important commitments in North African countries, including a $3.5 billion dairy farm in Algeria.
North African manufacturers, meanwhile, are increasingly targeting African markets. Egyptian pharmaceutical companies, for example, have become major exporters across the continent.
Regulatory challenges and logistical bottlenecks persist, but African trade integration is supported by a growing web of multilateral agreements. Regional frameworks including the Common Market for Eastern and Southern Africa (COMESA), the Agadir Agreements, and the African Continental Free Trade Area (AfCFTA)— launched in 2021 and designed to unify a market of 1.5 billion people—facilitate investment and commercial exchange.
Several countries also benefit from US and European trade preference programs such as the African Growth and Opportunity Act (AGOA), which allows some 30 African economies to export certain goods to the US duty-free. These arrangements make parts of Africa and MENA increasingly attractive as manufacturing and re-export bases for companies seeking to access Western markets.
“We’re starting to see more companies from Asia, for example, setting up a presence in the MENA region to benefit from a lower tariff environment, and I think Egypt will become a big beneficiary in terms of manufacturing,” El Nahas says.
Financing The Corridors
Moroccan and Egyptian banks have taken the lead in cross-border expansion, financing trade and infrastructure projects across the continent. Most international lenders, by contrast, maintain a limited on-the-ground presence in Africa but operate through regional hubs that circle the continent, notably in Morocco, Egypt, Nigeria, Kenya, and South Africa.
“Egypt is pivoting its export strategy toward Europe and Africa.”
Hisham Ezz Al-Arab, CIB
Several pan-African banks, meanwhile, including United Bank for Africa, Standard Group, and Ecobank, have set up a presence in the GCC—mainly in Dubai or Abu Dhabi—to facilitate trade and investment flows between the two regions. Gulf banks tend to manage African operations from Dubai, Abu Dhabi, or Doha, increasingly partnering with local lenders on large infrastructure projects and exploring collaboration in areas such as AI applications in banking.
The long-term potential is vast. Africa accounts for roughly 20% of the global population but just 3% of GDP. For now, intra-African trade represents only about 15% of the continent’s total trade, compared to over 50% in Asia and almost 70% in the European Union. For investors and policymakers, the opportunity lies in unlocking that untapped connectivity.
There is a geostrategic factor as well.
The US-Israeli war with Iran and the accompanying disruptions in the Strait of Hormuz have heightened the need for additional trade corridors, notably through the Red Sea and the Suez Canal.
“Egypt is pivoting its export strategy toward Europe and Africa to leverage its geographical proximity, filling supply gaps caused by delays from Asian competitors,” says Hisham Ezz Al-Arab, CEO of Commercial International Bank (CIB), Egypt’s largest private sector bank, which has a presence in Kenya and Ethiopia. “This surge in demand is expected to offset revenue losses of exports to the Gulf.”
In an increasingly fragmented global economy, both regions see value in strengthening ties. The geopolitical landscape in the Middle East and Africa remains volatile, but investors argue that deeper south-south integration may offer one of the most resilient growth paths.
