British Investigation Uncovers Dubai as Hub for Dirty Money Stolen from African Nations

A report released by the British publication “The Economist” characterizes Dubai in the United Arab Emirates as a hotspot for illicit funds looted from African nations, highlighting Abu Dhabi’s growing influence in the region.

According to findings cited by the European Microscope for Middle East Issues, the investigation reported that the Indaba Mining Conference, recognized as Africa’s largest mining gathering, has traditionally been viewed as a celebration of geological advancements. However, the recent assembly in Cape Town last February also assumed a significant geopolitical dimension.

The investigation reveals that the company is also examining International Holding Company, an Emirati conglomerate valued at $240 billion, matching the combined worth of BlackRock and BP. Moreover, its metals division acquired a 51 percent interest in a copper mine in Zambia in November.

The investigation confirmed that “Gulf interest in mining in Africa forms part of a broader trend.” The UAE, Saudi Arabia, and Qatar enjoy increasing influence in Africa. The continent is the destination of their capitals, the arena of their competitions, and the test of their global ambitions.”

Dubai now serves as a significant financial hub for African elites. With African leaders exploring alternatives to Chinese loans and reduced Western aid, the Gulf’s ascent is redefining the geopolitical landscape of the continent, bringing about both positive and negative outcomes.

The relationship between the continent and the Arabian Peninsula goes back centuries, as archaeologists have found Arab coins in Great Zimbabwe, a medieval country.

Arabs have long viewed the Horn of Africa, which is separated from the Arabian Peninsula by the Gulf of Aden and the Red Sea, as their neighboring region. Interest in the rest of Africa focused on supporting Islamic charities and purchasing agricultural land, but it diminished with the rise in oil prices.

This intermittent relationship has become more consistent with the Gulf countries asserting themselves as middle powers in a multipolar world. Although their methods differ, they share the belief that African countries are neglected by other countries, and that influence is cheap because of their poverty.

The population of Sub-Saharan Africa is more than 20 times that of the Gulf Cooperation Council countries (Saudi Arabia, the UAE, Qatar, Oman, Kuwait, and Bahrain), but its GDP is smaller.

The most evident indication of strengthening Gulf-African ties lies in their economic relations. During the 2000s, the yearly trade average between Sub-Saharan Africa and the UAE was less than half of that between the region and the United States.

Since 2020, there has been an increase in the total trade volume of imports and exports between the UAE and sub-Saharan countries.

Over the past decade, the UAE has been the fourth largest foreign direct investor in Africa, after China, the European Union, and America.

The UAE is expanding its presence in Africa to assist countries on the continent grappling with currency shortages, as shown by its recent commitment to invest $35 billion in Egypt. Additionally, the millions of Africans living in Gulf countries serve as a crucial source of remittances for their home countries.

The UAE has been particularly active in logistics and energy. It is China’s main competitor in African ports.

Dubai-based DP World operates ports in nine African countries, and in October won a new concession in Tanzania. Abu Dhabi Ports Group operates several other companies. This strengthens the UAE’s position as a hub between Africa and Asia, a role that Emirates Airlines reinforces.

The UAE is expanding its investments in Africa to support the development of oil and gas ventures, a move that comes amidst Western concerns about potential breaches of climate agreements. In December, Morocco and the UAE forged an agreement to construct a pipeline aimed at transporting gas from Nigeria to the Mediterranean.

Meanwhile, investors from the UAE rank among the largest contributors to renewable energy initiatives in Africa. Masdar, a state-owned company, has announced plans to allocate $10 billion towards enhancing electricity generation capacity in sub-Saharan Africa by 10 gigawatts. This represents a substantial increase, given that the current installed capacity in the region, excluding South Africa, is 89 gigawatts—nearly equivalent to that of Mexico.

Meanwhile, UAE investors rank prominently as leading contributors to renewable energy initiatives in Africa. Masdar, a state-owned enterprise, has committed to investing $10 billion to enhance electricity generation capacity in sub-Saharan Africa by 10 gigawatts. This investment is noteworthy, given that the current installed capacity in the region, excluding South Africa, amounts to 89 gigawatts—nearly equivalent to that of Mexico.

In the same context, an Abu Dhabi advisor says: “They want to show that they can implement these projects better than the West, and they want Africans to love them.”

In November, the first-ever Saudi-African summit occurred, representing the latest iteration of the “Africa+1” gatherings, modeled after the triennial Chinese conferences. Saudi Arabia announced plans to invest more than $25 billion in Africa by 2030 and committed an additional $5 billion in aid.

Qatar’s involvement in Rwanda illustrates how relatively modest investments (in Gulf terms) can have significant impacts in Africa. The Qatar Investment Authority (QIA), a $500 billion sovereign wealth fund, partnered with the Rwanda Social Security Board, a local fund, as a co-investor in an African fund. Additionally, the Qatar Investment Authority holds a 60 percent ownership stake in a project aimed at constructing a new airport located south of the capital city, Kigali.

There are three reasons why Gulf countries attract Africa. First, they have money to spend when others withdraw. In the 2020s, new Chinese lending to Africa was on average 10 percent of what it was during the 2000s ($1.4 billion annually versus $14 billion).

In 2022, the portion of Western aid directed to Africa dropped to its lowest point since at least 2000. Additionally, Gulf authoritarian regimes are perceived as notably more expeditious than the West or the World Bank.

In January, Uganda chose an Emirati company to build a $4 billion refinery after completing a deal with an American group that it said was taking too long.

Third, the Gulf region is seen as a model for African countries seeking to diversify away from natural resources.

An advisor to an African president adds: “Like the Chinese, it doesn’t hurt to be polite and roll out red carpets, even for the leaders of small countries.”

The Gulf region’s economic expansion is complemented by a diplomatic initiative. Between 2012 and 2022, Qatar and the UAE doubled their embassy presence in Africa. Saudi Arabia intends to boost its diplomatic missions to 40 from the current 28. African leaders united in condemning the Israeli incursion into Gaza.

It’s hard to conceive that South Africa would bring its case to the International Court of Justice, accusing the Israeli-occupying state of genocide in Gaza, without the backing of Gulf States, Qatar included. South African President Cyril Ramaphosa’s visit to Qatar in November, roughly six weeks before submitting the court application, underscores this reliance on support.

However, the Gulf States could also destabilize Africa, undermining Western goals in the process. This is especially true for the UAE, which is considered the most risk-taking in pursuing its geostrategic interests on the continent.

The United Arab Emirates utilized its economic power and weapon supplies to establish a network of clients in Northeast Africa. Among them are Khalifa Haftar, the powerful Libyan figure, and Mohamed Hamdan Dagalo, the Sudanese warlord known as Hemeti, as well as Chadian President Idriss Deby. The UAE’s support for Hemeti’s Rapid Support Forces has contributed to the ongoing civil war in Sudan since 2013.

In addition, the UAE has established a close relationship with Abiy Ahmed, who is the Prime Minister of Ethiopia, funding infrastructure projects and supplying drones used in the civil war in Tigray.

Eritrea and Somalia have sought Saudi Arabia’s help to counter what they see as a UAE-backed scheme led by Abiy to officially recognize Somaliland’s separatist status in exchange for land to build a port, enabling sea access. A Western diplomat based in Ethiopia admits to a lack of understanding of the complexities of the situation.

Another aspect to consider is the potential role of Dubai, specifically, in facilitating corruption in Africa. While European countries have made pledges to strengthen financial regulations over the past decade, African business and political elites have frequently looked to Dubai.

In 2021, there were more than 26,000 African companies in Dubai, an increase of about a third from four years ago, according to the Dubai Chamber of Commerce.

Most capital flows from Africa to Dubai are perfectly legal, and rational for elites keen to keep their money.

“Many Africans do not trust their economies,” says Ricardo Soares de Oliveira, from Oxford University.

Unlike the Chinese or Indians who use Caribbean tax havens or Mauritius before bringing money home, “Africans don’t make a lot of round trips: it’s mostly one-way.”

Nonetheless, several reports highlight a more concerning aspect of Dubai. In 2020, a report from the Carnegie Endowment for International Peace, a think tank, asserted that “Dubai’s real estate market attracts illicit funds.”

It identified 34 Nigerian governors, seven senators, and 13 ministers who own real estate in Dubai, and says its cost appears to “exceed what their official salaries allow.”

Also in 2020, the Sentry organization, a regulatory body, alleged that Dubai imports around 95 percent of its gold from conflict-ridden areas like Sudan, South Sudan, Congo, and the Central African Republic.

Last year, an Al Jazeera report revealed that Zimbabwean elites smuggled billions of dollars in cash and gold to Dubai. Hemedti became wealthy, in part, by selling Sudanese gold through Dubai, according to the United Nations.

The investigation pointed out that Dubai’s openness, with both positive and negative implications, wasn’t initially intended for Africa. However, its function as a gateway for affluent Africans and their finances has a significant impact on the continent. Soaresdi Oliveira remarked, “Africa might represent a small portion of Dubai, but Dubai holds great importance for Africa.”

He mentioned that the rise of the Gulf offers African leaders a familiar option. Do they use partnerships with external powers for their benefit or the benefit of their citizens? And for the West, there is another dilemma. On the one hand, they want more African minerals and less Russian and Chinese influence in Africa.

Conversely, he aims to advocate for good governance. While it may seem enticing to view the Gulf States as a pathway to accomplishing the initial objective, this perspective diminishes if they compromise the latter objective. The Gulf States, particularly the UAE, frequently harbor divergent interests in Africa, and they pursue them assertively.