2024 ‘New Africa Summit’ in Riyadh and the Future of Saudi-African Cooperation

Saudi Arabia has been forging diplomatic ties with the African continent since the 1970s. They were strengthened in 2018 with the appointment of a secretary of state dedicated to African Affairs. Equally, Saudi Arabia has been a site of pilgrimage and trade for centuries, a connection that has intensified with the advent of air travel. Known for its vast reserves of minerals, gas, oil, arable land, and both renewable and non-renewable energy sources, Africa holds a significant portion of the world’s natural resources. The continent is home to almost all precious minerals and encompasses around 30% of the world’s mineral reserves. Accordingly, countries like South Africa, Nigeria, Algeria, Angola, and Libya account for over two-thirds of Africa’s mineral wealth, largely due to oil, with South Africa standing out for its abundance of gold and other valuable resources.  In recent years, the Middle East has been gaining prominence in the global funding space, driven by factors like economic diversification, substantial sovereign wealth funds, and a global funding downturn, leading to a search for new sources of venture capital. With a “roaring comeback” in oil prices since 2021, the Gulf states have been on a spending spree. On the other side of the world, US and European venture capitalists are facing the worst funding crunch in a decade. While the Middle East is a sought-after destination for investment, the interesting news is the region’s increasing interest in Africa.

Over the years, the economic landscape has evolved, prompting both Saudi Arabia and African nations to diversify their interests. Previous joint initiatives have seen investments in sectors beyond energy, including agriculture and technology. This also reflects a shared commitment to creating a more balanced and sustainable economic relationship that goes beyond the traditional boundaries of energy cooperation. While the Kingdom continues to modernize and evolve, it also maintains strong and historic ties with Africa. Saudi Arabia’s strategic location as a hub connecting Europe, Asia, and Africa makes it an essential player in regional and global trade. The Kingdom has a long-standing relationship with African nations, having provided over $45 billion in aid to support development and humanitarian programs across the continent. The first Saudi-Africa summit held in November 2023 reinforced Saudi Arabia’s commitment to African development, focusing on expanding trade and supporting the African Union’s accession to the G20. The Kingdom recognizes the critical role Africa plays in world affairs and is keen to enhance partnerships across the continent.

The Growing Saudi-Africa Alliance in the Last Decades

At the first Saudi-African Summit, Saudi Arabia, for its part, emphasized its historical ties with the African continent and its interest in developing relations with all its countries in the political, economic, investment, trade, and development, cultural and social fields. Likewise, the Kingdom plays a pivotal role in international and regional efforts to establish security and stability, resolve conflicts, fight terrorist groups and extremism, and improve the security capabilities of African countries. Furthermore, due to the Kingdom’s special interest in the African continent, its total investments in Africa during the last ten years amounted to a SAR 49.5 billion. The number of Saudi companies operating there reached 47 businesses working in the fields of renewable energy, food and beverages, business services, financial services, and consumer products.

Again, Saudi Arabia has committed $41 billion in financing over the next decade to support sub-Saharan African countries, with $25 billion earmarked for foreign direct investments by Saudi private companies. This commitment was revealed by Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan at the Future Investment Initiative New Africa Summit in Riyadh, attended by private investors and representatives of major funding bodies. According to Al-Jadaan, the $41 billion includes a $1 billion regional development initiative, $5 billion in funding dedicated to African startups, and $10 billion in financing from the Saudi Export-Import Bank (Saudi EXIM Bank). $25 billion will also be invested by Saudi Arabia’s private sector. Al-Jadaan also shared that a coalition of Gulf-supported regional funding bodies is preparing to grant African nations a combined $50 billion in loans by 2030. This coalition, known as the Arab Coordination Group (ACG), includes the Saudi Fund for Development, Abu Dhabi Fund for Development, Arab Bank for Economic Development in Africa, Arab Monetary Fund, and the Islamic Development Bank.

What is the ‘New Africa Summit’?

The New Africa Summit at the 8th edition of Saudi Arabia’s Future Investment Initiative (FII) was held from October 29 to 31, 2024, with additional engagements which started in October 27, 2024, in Riyadh, Saudi Arabia. Themed “Infinite Horizons,” the FII aims to showcase how investment can drive a sustainable and prosperous future, gathering influential leaders to push the boundaries of human potential. FII8 promises to be a melting pot of innovative ideas, bringing together global leaders, entrepreneurs, political leaders, media and decision-makers in finance, AI, sustainability, energy, geoeconomics, space and beyond. While the primary goal of the summit is to explore how investment can serve as a catalyst for a prosperous and sustainable future, pushing the boundaries of what is possible for humanity. The summit four main objectives are:

• Forge New Ties: Facilitate business relationships between CEOs, leaders, entrepreneurs, and professionals from the African continent and investors, particularly to stakeholders in the Middle East.
• Present Risk & Opportunity Insights: Provide delegates with first-hand accounts of the risks, opportunities, challenges and success stories of investing in African companies across all stages of their ventures.
• Stimulate Capital Flow: Promote foreign investment into Africa by showcasing strategies, approaches, mechanisms, and opportunities in the continent’s diverse economic landscapes.
• Explore Emerging Sectors: Discuss emerging sectors with high growth potential in Africa, such as renewable energy, technology, agriculture, and entertainment.

Founded in 2017 as an annual event to connect people and invest in promising solutions, the FII FII Institute has since evolved into a global non-profit foundation with an investment arm. This event follows 2023’s edition, where $19 billion worth of agreements was announced, according to the entity’s annual report. “An endless horizon is not just a slogan, but rather a clear invitation to expand our collective vision and embrace the unlimited future prospects where investment does not know boundaries and work for a better tomorrow for everyone,” CEO and member of the Board of Directors of the FII, Richard Attias said.

The Governor of the Public Investment Fund, Chairman of Saudi Aramco, and Chairman of the FII Institute Yasir Al-Rumayyan emphasized the conference’s role as a catalyst for action, progress, and solutions. He noted that the initiative has facilitated deals worth over $125 billion. Dubbed “Davos in the Desert,” the FII is the Middle East’s largest investment Forum, attracting over 7,000 global leaders from politics, business, and finance. This year, the Summit began with a pre-event focused on Africa, featuring high-profile attendees such as Senegalese President Bassirou Diomaye Faye and UBA Chairman Tony Elumelu. Senegalese President Faye highlighted Senegal’s readiness for investment, especially in industrialization, green energy, and digital technology. The summit covered key topics like AI, health, education, and innovation. During a panel discussion, Saudi Investment Minister Khalid Al-Falih said that Saudi Arabia would work with African countries to create beneficial investment opportunities. He noted that the Kingdom has billions in development aid across the continent, with total investments increased to approximately $45 billion, reaching the majority of African nations. Al-Falih stressed the importance of collaboration to drive economic growth and encourage investment from Saudi companies, recognized for their effectiveness and ambition.

Saudi-African Relations: The Mutual Benefit 

Norman Roule, a non-resident senior advisor at the Center for Strategic and International Studies (CSIS), said the high level of participation at FII was reflective of strong private sector confidence in the economic, commercial, and social reforms as well as the ambitions of Saudi Arabia and Gulf countries. “The transformative potential of the Kingdom’s programs should also be seen in terms of development for Africa and infrastructure connectivity between Europe and Asia,” Roule, who worked for the CIA for 34 years, said in a post on X. Analyst says, investing in Africa is certainly nothing new for Riyadh, but this time it seems that the Saudis are determined to catch up on the African continent. In an interview with Africa News Hicheme Lehmici, geopolitical expert and Secretary of the Geneva International Peace Research Institute (GIPRI) notes that, “Saudi Arabia has a very advanced, very powerful long-term strategic vision, and Africa is an integral part of this vision.”