Africa: the last economic frontier

With the inevitability of a Bob Geldof concert on a St Patrick's Day weekend, the Gulf is leading the new wave of investment in Africa.

Old-fashioned commodities represent one of the biggest attractions for the raw material-starved industrial giants of Saudi Arabia, Qatar and the UAE.

Geldof usually has a thing or two to say about the foreign appropriation of Africa's natural resources and recently he had the ear of the world's most powerful man after a stint aboard Air Force One.

Later, in an interview carried in Time magazine, the patron saint of expletives quotes a suspiciously eloquent extract from US president George W Bush. During the mile-high exchange, Bush seems to borrow heavily from the ‘Give a man a fish and you feed him for a day, teach him how to fish, feed him for a lifetime' theme.

Geldof describes Bush referring to the need for Africans to stop sending us steel to make knives when they should be making the cutlery themselves: "Or the juice and not the orange. The chocolate and not the bean. The shirt and not the cotton. The bracelet and not the diamond."

As Sir Bob touched down in Dubai's Irish Village this week to belt out a few old numbers, the presidents of both Sudan and Mauritania were on their way back home after their state visits to the UAE. They were here to talk about the investment opportunities arising from their commodity wealth - oil in the case of Sudan, iron ore and copper for Mauritania. From cobalt to copper, Africa's commodity markets are booming.

As the price of such commodities soar, Africa's mineral wealth is becoming increasingly attractive to Gulf investors seeking to gain more control over the raw materials that they need for their industrialisation plans.

Business leaders including Kingdom Holdings' HRH Prince Alwaleed and DP World's Sultan Bin Sulayem, are leading the charge on the continent and in this week's issue, they explain why they see Africa as a new land of opportunity.

Mining prospects, once marginal, are becoming viable once more, as the price of metals trends upwards. The abundant liquidity in the Gulf region is a big attraction for some African states seeking to develop their mineral wealth, at a time when alternative potential sources of funding from outside the region are becoming more risk averse.

The commodity story is not the only one that interests Gulf companies currently eyeing expansion in Africa. Phone companies including the UAE's Etisalat and Kuwait's Zain are looking to African countries including Nigeria, Sudan and Benin, in the battle to boost mobile penetration as their domestic markets reach saturation. At the same time the region's real estate giants are also investing heavily in the emerging markets of Morocco, Egypt and Tunisia and Algeria.

If Africa represents the last frontier, as an economist in this week's cover story suggests, Gulf investors are well on their way to conquering it.

RELATED ARTICLES: Into Africa, The other Sudan, Africa on the line, Rising from adversity

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