The UAE Faces Pushback on African Investments

Africa Brief: The UAE Faces Pushback on African Investments

The AGOA summit hosted by South Africa, a prison break in Guinea, and Zimbabwe’s lithium windfall. China and Activists Complicate the UAE’s Push for Ports In a bid to become the hegemonic power in the Middle East and outperform other Persian Gulf nations, such as Saudi Arabia and Qatar, the United Arab Emirates has been expanding its influence in Africa through port access. Members of the Emirati royal family operate around 12 ports across Africa through state-owned companies, and that investment is growing—including plans finalized last year to build a $6 billion Red Sea port north of Port Sudan. The United Arab Emirates has been the fourth-largest investor in Africa over the past 10 years, after China, the EU, and the United States. Investment from the UAE to Africa hit nearly $60 billion over the decade, focused on infrastructure, energy, transport, and logistics. But a new multimillion-dollar deal between Tanzania’s government and maritime giant Dubai Ports World (DP World), which is owned by the Emirati royal family, has provoked public anger and political opposition. Under the agreement, DP World will invest $250 million to upgrade and exclusively operate about two-thirds of Dar es Salaam’s port for 30 years. DP World said that its investments into the port’s facilities could rise to $1 billion over the concession period .The deal was signed on Oct. 22, but reports of the contract first emerged in July, when civil society groups and the opposition argued that it “violated Tanzania’s constitution and endangers national sovereignty.” On Aug. 10, Tanzania’s High Court in Mbeya dismissed a petition that challenged the legality of the port agreement. At least two dozen people were arrested for opposing the deal, Amnesty International said in August. Some have since been released. Critics argue that the terms of the deal favored the UAE and undermined local rights and management. However, Tanzanian Transport Minister Makame Mbarawa said Tanzania would retain 60 percent of earnings. DP World began investing in the Horn of Africa more than two decades ago by managing the Port of Djibouti, constructing additional terminals and helping to finance roads and infrastructure. The port alone accounts for 95 percent of Ethiopia’s imports. The company quicky ramped up investments into port operations in Angola, Egypt, Morocco, Mozambique, Senegal, and—controversially in 2016—a 30-year concession to operate a port in the breakaway region of Somaliland. The deal led to a clash with Somalia’s government, which wanted DP World to liaise directly with Mogadishu. This didn’t stop DP World signing a $366 million port expansion in the semi-autonomous Puntland region of Somalia, or from launching the construction of a $1.2 billion deep-sea port in the Democratic Republic of the Congo, which is expected  to be completed by 2025.Behind the scenes, the UAE has long embroiled itself in Sudan’s internal conflicts as part of a proxy war with Saudi Arabia. “As emerging Middle East hegemons, Riyadh and Abu Dhabi are now at odds—each seeking to control Sudan’s resources, energy, and logistics gateways by aligning with [Sudanese Armed Forces Gen. Abdel Fattah] Burhan and [Sudanese Rapid Support Forces Gen. Mohamed Hamdan Dagalo] Hemeti, respectively,” Middle East scholar Talal Mohammad wrote recently in Foreign Policy.Yet Abu Dhabi’s quest for regional influence has come up against China’s dominance. In 2018, the Djibouti government seized the UAE-built and -run Doraleh port, located near Djibouti’s main port, and handed the terminal over to Hong Kong-based China Merchants Port Holdings. This coincided with the opening of a $3.5 billion free trade zone of state-owned Chinese firms next to the port. However, DP World, which had a 50-year concession since 2006, argued that the plan violated its “exclusive access” deal.The Djibouti government blamed DP World’s refusal to “settle amicably” when it terminated the contract. Sultan Ahmed bin Sulayem, the chairman of DP World, reportedly said that the UAE would “send Djibouti back” to the conditions in which it existed before its investments. The dispute was thought to have started after Djibouti rejected proposals for a UAE military base there—but then allowed China to establish a base in 2017.While the Djibouti government accused the firm of using corruption to secure its Doraleh concession, a Hong Kong appeals court ordered Djibouti to pay DP World more than $600 million in damages following previous rulings from a London arbitration court. There are other pending lawsuits related to the spat, including one being heard in a U.S. federal court. In its recent deals, the UAE is increasingly coming under pressure not from China but from human rights organizations, following the arrests of critics who have opposed its deals. Last year, more than 70,000 Maasai were evicted from their ancestral lands within a conservation area in Tanzania. According to rights groups, this was so the Tanzanian government could turn part of the area into a luxury game reserve—allegedly for the Emirati royal family as the country pushes for more tourism from the UAE.

Source: Foreign Policy

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