World Bank warns $113 billion Gulf investment in Africa at risk amid Middle East conflict

Investment momentum from the Gulf to Sub-Saharan Africa, worth about US$113 billion (Sh14.59 trillion), is at risk of slowing, the World Bank has said.

This is on the back of the ongoing Middle East conflict, a crisis the lender says has prompted sovereign wealth funds to reassess exposure and investment priorities.

It reckons that the shift could delay or scale back major projects.

“Heightened uncertainty is prompting sovereign wealth funds to reassess exposure and investment priorities, potentially delaying or scaling back large-scale projects in energy, including hydrogen, solar, and wind, as well as in infrastructure, logistics, mining, and agriculture,” the lender said.

It adds that some strategic renewable energy projects may remain insulated due to long-term diversification goals in the Gulf.

The uncertainty is already influencing funding decisions, with early-stage and pipeline projects considered most vulnerable to delays or reprioritisation.

The Gulf countries, led by the United Arab Emirates, Saudi Arabia and Qatar, committed 156 greenfield FDI projects in Africa in 2022 and 2023 alone, collectively valued at $113 billion (Sh14.59 trillion).

These funds have largely flowed into renewable energy projects, including hydrogen, solar and wind, as well as ports, warehouses, data centres, mining and agriculture.

The United Arab Emirates accounted for about $59.4 billion (Sh7.67 trillion) of the total, with heavy exposure in critical minerals such as copper, nickel and cobalt, alongside logistics investments aimed at strengthening food and energy security.

Other Gulf-backed initiatives have also expanded into African agriculture, including land acquisitions, food production and processing facilities targeting both local and export markets.

Beyond investment flows, the report flags rising risks to remittances from Gulf-based migrant workers, a key source of income for African households.

The lender estimates that countries such as Kenya could lose up to $40 million (Sh5.17 billion) monthly as weaker labour demand, slower hiring and possible repatriations weigh on earnings in construction and service sectors.