Massive Financial Scandal Uncovered in UAE’s African Deal
Financial corruption and fraud have surfaced in a significant UAE deal in Malawi, marking the latest in a string of schemes by Abu Dhabi to expand its influence through questionable Emirati funds.
A fuel contract signed by a UAE-based company with the Malawian government has sparked controversy in the economically challenged African nation, as the deal was finalized without a competitive bidding process.
The Malawian government entered into a fuel supply agreement valued at K128 billion (approximately AED282 million) with a company owned by Ahmed bin Faisal Al Qasimi, a member of the ruling family from Sharjah.
The suspicious deal, which was revealed by the Investigative Journalism Platform (PIJ), was facilitated by the National Oil Corporation of Malawi (NOCMA) and involved the purchase of 250,000 tons of fuel at $295 per ton, worth $74 million (AED282 million).
The deal indicates the extent to which Emirati money is used as a tool of influence in resource-rich African countries.
The website expressed surprise over reports that 50% of the deal’s value will be paid upfront to Sheikh Al Qasimi through QLV Digital Fx (Malawi) Limited, a company based in the Malawian capital, Lilongwe, and registered in the country on September 26, 2023.
According to Malawian law, the National Oil and Gas Authority, as the procurement body, is required to publicly announce all bids for competitive tenders on purchases exceeding 100 million kwacha. However, this procedure was not followed in this case.
A source told PIJ that the deal could be a ruse to hide payments to local officials and could come back to haunt taxpayers in the future, as the agreed kwacha payments could be changed to today’s rate to accommodate exchange rate changes.
The website reported that experts confirmed that the deal lacked transparency and competitive bidding, describing it as a massive attempt to deceive the state.
Michael Kayatsa, Executive Director of the Center for Human Rights and Rehabilitation, stated, “This is taxpayer money at stake. Such agreements imply that taxpayers are funding questionable deals, and if they fall through, it’s the taxpayers who bear the burden, as these funds could have been used for essential medicines.”
Ahmed bin Faisal Al Qasimi has an extensive business network in Africa and has an office in Dubai, and a special team of Emirati, Arab and foreign advisors to manage his business and foreign relations.
Expanding Influence Through Wealth and Conflict
A recent investigation by the British newspaper Financial Times has confirmed that the UAE is extending its influence in Africa through financial power, bloody conflicts, and by fueling civil wars to exploit the wealth of local populations.
The investigation highlighted an incident where UAE President Mohammed bin Zayed Al Nahyan flew several hundred friends to a private airport in South Africa’s Eastern Cape province to celebrate Eid last year, showcasing both the opportunities and risks of engaging with a new, cash-rich player in Africa.
The report mentioned that before staying at his private resort in one of South Africa’s poorest regions, the UAE ruler allegedly donated 20 million rand ($1 million) to upgrade the runway at the remote airport, which authorities temporarily designated as an international port of entry for the event.
However, despite these gestures of goodwill, South Africa was unable to convince the UAE to extradite the Gupta brothers, who are accused by South African authorities of looting the state.
The Guptas fled to the UAE in 2018 but about two weeks before Sheikh Mohammed was due to tour the Eastern Cape, a Dubai court refused to extradite two of the brothers, citing incorrect paperwork, which South Africa’s ruling justice minister described as “shocking”.
The fact that South Africa still rolled out the red carpet for Sheikh Mohammed and his entourage underscores the UAE’s growing influence in the country and across the continent, highlighting the complexities that this new alignment can occasionally create.
As China repays loans to Africa, the oil-rich Gulf state has become an increasingly important source of foreign investment.
Investments for Influence
In 2022 and 2023, the UAE committed $97 billion to new investments in Africa across sectors such as renewable energy, ports, mining, real estate, telecoms, agriculture, and manufacturing—three times more than China, according to fDi Markets, a firm owned by the Financial Times that tracks cross-border greenfield projects.
A UAE official told the Financial Times that the country’s total investment in Africa has reached $110 billion, emphasizing the UAE’s “commitment to fostering sustainable development and growth across the continent.”
The UAE is now “going head-to-head with Beijing,” says Ken Obalo, an associate professor at Georgetown University in the U.S., referring to the nation’s growing presence in Africa. While many of these investments may not come to fruition, he notes that the UAE has consistently ranked among the top four investors on the continent over the past decade.
UAE companies have taken on projects in Africa that more cautious investors have avoided.
Hamad Buamim, chairman of Dubai’s leading trading hub, the Dubai Multi Commodities Centre, emphasizes that Africa offers significant potential in terms of commodities and minerals, despite facing “challenges related to policies and politics.”
Fueling Civil Conflicts
The UAE’s substantial financial resources enable it to impact both the economic paths of African countries and, in some instances, the political prospects of certain African leaders.
In 2021, during Ethiopia’s civil war, the UAE provided military drones to the Ethiopian government as fighters from the Tigray People’s Liberation Front advanced on Addis Ababa, according to a senior U.S. official and Tigrayan leaders. An Emirati official clarified that the UAE’s support was intended for the institutions and citizens of Ethiopia rather than any particular factions or individuals.
Similarly, when Sudanese generals overthrew Omar al-Bashir in 2019, the UAE intervened to stabilize the new regime and later provided some support to the paramilitary Rapid Support Forces in the civil war that erupted last year, according to a U.N. panel of experts. However, the UAE strongly denies backing either side in the conflict and has publicly called for peace.
Murithi Mutiga, Africa program director at the Crisis Group, a nonprofit, says the UAE’s engagement in places like Sudan is partly driven by its desire to combat Islamist extremism.
But he says it has also seized the opportunity to diversify its economy with investments in food security, critical minerals, and renewable energy.
Mutiga describes this situation as contradictory. “China represents a status quo power, Russia is a revisionist power, and the UAE is oscillating between the two,” he says, referring to the UAE’s positioning relative to other major foreign players in Africa.
Western officials argue that the increasing influence of the UAE and other Gulf states in Africa introduces a new level of complexity.
“One former Biden administration official, who wished to remain anonymous, commented, ‘This is a new reality, where you have middle powers and global powers operating on the continent.’”
While Abu Dhabi—UAE’s oil-rich capital and a key player in foreign policy—has seen a rise in influence recently, Dubai, as the region’s financial and commercial center, has long been a significant financial hub.
African companies are increasingly choosing Dubai as their base for global trade, says Buamim. “Dubai has strategically positioned itself as the gateway to Africa.”
The number of African companies registered in Dubai has surged over the past decade, reaching 26,420 by 2022, according to the Dubai Chamber of Commerce.
“Dubai is now the New York for Africans,” remarks Ricardo Soares de Oliveira, an Oxford University professor of international politics who has studied Africa-UAE relations.
Expansion Plots
The Emirati official asserts that their involvement in Africa—ranging from trade and food security to counterterrorism—is aimed at “promoting a prosperous future based on mutual benefit.”
However, some view the UAE’s activities in Africa as part of a broader strategy to increase global power.
Saad Ali Shire, Finance Minister of Somaliland, the breakaway republic where Dubai-based logistics firm DP World has made significant investments, is clear about the UAE’s expanding influence. “The UAE is emerging as a new superpower in Africa,” he states.
The UAE’s involvement in Africa can be divided into three broad, though overlapping, categories. The first is purely commercial, the second is strategic, and the third is financial. Traditionally dominated by global hubs like London or Zurich, Dubai has emerged as an appealing jurisdiction for Africans to trade, conduct business, and hold offshore funds.
“The UAE, along with other Gulf states, is being driven by the energy transition and the urgent need for economic diversification,” says Anna Jacobs, senior Gulf analyst at Crisis Group. “Africa represents a vast untapped market with abundant minerals and agricultural potential.”
On the commercial front, clean energy is a key area of focus. Over the past decade, Masdar, the renewable energy company based in Abu Dhabi, has developed infrastructure including five wind farms in South Africa, a battery storage system in Senegal, and solar facilities in Mauritania.
Masdar is leading the UAE’s plans to invest $10 billion to increase sub-Saharan Africa’s power generation capacity by 10 gigawatts.
However, Emirati companies are also investing in fossil fuels. Abu Dhabi National Oil Co. bought a 10 percent stake in Mozambique’s Rovuma gas basin from Portuguese energy company Galp for about $650 million in May.
In real estate, Dubai Investments, a listed conglomerate whose largest shareholder is Dubai’s sovereign wealth fund, announced this year that it would start work on a 2,000-hectare development in Angola. The Abu Dhabi-based telecoms company, formerly Etisalat and now e&, operates in 12 African countries.
Mineral Exploitation, Especially Gold
Emirati companies are also capitalizing on a mining boom. Last year, International Resources Holding (IRH), a subsidiary of the $240 billion Abu Dhabi conglomerate International Holdings, chaired by UAE national security adviser Tahnoon bin Zayed Al Nahyan, acquired a majority stake in Zambia’s Mopani copper mine—previously owned by Glencore—for $1.1 billion.
IRH has also shown interest in investing in Angola, Kenya, and Tanzania mines.
In 2023, the government of the Democratic Republic of Congo awarded Primera, an Abu Dhabi-based gold trading company, a 25-year monopoly over all small-scale “artisanal” gold supplies in the country.
A significant portion of Africa’s gold, whether legally traded or smuggled, passes through Dubai, according to experts and African government officials.
Peter Pham, former special envoy to the Great Lakes region under President Donald Trump, describes the UAE’s mining ambitions in Africa as “relatively benign” and aligned with Washington’s interests.
“They’re easing the Chinese and providing an alternative supply chain,” he says. “If they can pull it off, I care about everything.”
Not all of the UAE’s investments are free from controversy. In Tanzania, human rights groups have accused authorities of forcibly and violently evicting thousands of safari and hunting communities from their land to pave the way for a project connected to a UAE company.
Activists have also criticized Blue Carbon, a Dubai-based private investment firm, accusing it of attempting to seize millions of hectares of African forests in what they view as a greenwashing effort. This follows initial agreements in Liberia, Tanzania, Kenya, Zambia, and Zimbabwe aimed at generating carbon credits.
Perhaps the biggest difference the UAE’s money has made is in logistics, where the UAE’s commercial and strategic ambitions overlap.
DP World is present in nearly a dozen African countries after pouring some $3 billion into the continent.
It now operates ports from Mozambique on the Indian Ocean in the south to Algeria on the Mediterranean in the north and Angola on the Atlantic, almost encircling the continent.
“Our involvement in these markets is not motivated by a political agenda,” stated Mohammed Akuji, DP World’s chief executive for sub-Saharan Africa. “It is driven by a business agenda, which may also lead to additional benefits.”
He acknowledges a broader strategy to link Dubai with Africa through trade. “There is a clear vision from the Emirates,” he says. “The Dubai government is leveraging companies like DP World and Emirates [the airline] to establish a global presence.”
AD Ports, an Abu Dhabi logistics company majority-owned by sovereign investor ADQ, operates fewer ports in Africa than DP World, but there are signs it wants to catch up.
Last year, DP World secured a 30-year concession to manage the port of Pointe-Noire in the Republic of Congo, and in April, it obtained a 20-year concession to operate Angola’s Luanda terminal, with an initial commitment of $250 million for modernization.
“When the government invests in its trading partners, the private sector naturally needs to follow suit and invest,” says Ross Thompson, chief strategy and growth officer at AD Ports Group.
Agents of Chaos
The UAE operates without adhering to conventional rules in Africa, particularly in Sudan, where they are seen as agents of chaos.
The strategic significance of the UAE’s port investments is particularly clear in Berbera, the principal port of Somaliland, the self-declared republic on the Gulf of Aden, where Emirati flags dot the desert landscape.
DP World has invested $300 million in the port and an adjacent free-trade zone, while the UAE is also modernizing the port city’s airport. Moreover, Somaliland has granted the UAE a 25-year concession to build a naval base.
The political implications are significant. DP World took over the Berbera port in 2017, shortly after being expelled from Djibouti, which accused the company of “colonialism,” charges that DP World denies.
Since relocating 250 km south to Berbera, the Abu Dhabi Fund for Development has invested nearly $90 million in constructing a smart paved road that connects Berbera to the capital, Hargeisa, and, importantly, to the Ethiopian border.
This year, in a move that angered Somalia, which rejects Somaliland’s claim to independence, Addis Ababa signed a deal with Hargeisa.
In return for recognizing Somaliland as a legitimate state, landlocked Ethiopia will gain access to a stretch of coastline on the Red Sea where it can develop a port and naval base.
Many see the UAE’s hand behind the bold play. “When it comes to the UAE government, they are seeking political influence in the region,” says a senior Somali official.
The UAE’s most controversial alleged actions in Africa have occurred in war zones. In 2019 and 2020, it actively supported Libyan warlord General Khalifa Haftar after he launched an offensive on Tripoli to overthrow the UN-backed government.
Most controversially, the UAE has fueled Sudan’s civil war by helping to arm General Mohamed Hamdan Dagalo, known as Hemedti, an accusation the UAE has repeatedly denied.
Hemedti, a former camel trader with past ties to the UAE, now runs the Rasani Support Forces paramilitary force fighting for control of the country. Human Rights Watch has accused the Rasani Support Forces of ethnic cleansing in Darfur.
Despite the UAE’s denials, an independent panel of UN experts says there is some evidence that it has been supplying weapons under the guise of humanitarian aid via Chad.
“The UAE is not playing by any rulebook in Africa,” says Cameron Hudson, a Sudan expert at the Center for Strategic and International Studies in Washington. “They are agents of chaos in Sudan.”
Providing a Money-laundering Environment
The third role the UAE plays in Africa is as a financial free-market hub.
Western law firms, investment banks, and wealth managers in Dubai now provide services—including dispute arbitration—that companies from Africa and other regions have traditionally sought in London and Geneva, according to Oxford’s Soares de Oliveira.
“Dubai is the perfect ecosystem: it offers the same world-class services that are essentially Anglo or Swiss, but it’s lawless enough to be a free-for-all,” he says.
Dubai is still seen as a more flexible jurisdiction despite being removed from the Financial Action Task Force’s (FATF) “grey list” in February after two years of the naughty move, he says, although centers such as London remain conduits for dubious transactions.
Dubai is the perfect ecosystem: it offers the same world-class services that are essentially Anglo or Swiss, but it is not legal enough to be a free-for-all.
Many of the more than 26,000 African companies registered in Dubai are “mailbox companies,” says Soares de Oliveira. “That allows Africans to move dollars out of African economies. You pay suppliers in Dubai and the money never comes back.”
Wealthy Africans, including politically exposed people, also find Dubai a haven where they can buy property and enjoy a world-class lifestyle.
Another prominent resident is Isabel dos Santos, the billionaire daughter of Angola’s former president, who moved to the city in 2020 days after the new Angolan government froze her assets.
The expanding presence of the UAE and other Gulf states in Africa and vice versa presents a dilemma for Washington.
The former Biden administration official says the United States does not agree with everything the UAE does there, but considers it a vital global ally, including in the Middle East.
“He’s a tough actor,” he adds. “In Africa, they’re both investing in positive ways and acting in destabilizing ways at the same time.”
Hudson at the Center for Strategic and International Studies is more skeptical. “It might be okay in the short term,” he says. “Let me do what I want in Sudan and I’ll give you what you need in Gaza. It’s a very transactional relationship, but it’s not a friendship.”
