• Monday, December 23, 2024
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Nigeria, others top trading partners for Gulf Cooperation Council

Nigeria, others top trading partners for Gulf Cooperation Council

Nigeria and six other African countries have been identified as Prominent African trading partners for the Gulf Cooperation Council, a regional, intergovernmental, political, and economic union.

This was disclosed in Afreximbank Research’s report titled ‘Rising Gulf Investments in Africa – Unlocking Opportunities and Navigating Challenges’ released in December, 2024.

“Prominent African trading partners for the Gulf Cooperation Council (GCC) include Egypt, South Africa, Nigeria, Kenya, Morocco, Sudan, and Eritrea, signaling a robust and mutually advantageous economic collaboration across various sectors,” the report disclosed.

It stated that this evolving relationship indicates the strategic economic alliances forged in the context of global trade patterns.

“Gulf exports to Africa climbed from $30 billion in 2016 to $51 billion by 2023, with a peak of $65 billion realised in 2022,” the report stated.

“Regarding remittances, the Middle East played a pivotal role in 2022, contributing 27 percent of total remittance flows to Africa, contrasting with 23 percent from Western Europe,” it said.

The report stated that Egypt emerged as the leading recipient, with remittances amounting to approximately $32 billion, followed by Nigeria, Morocco, Ghana, and Kenya.

“In 2023, remittances from GCC countries to Kenya alone exceeded $3 billion, significantly bolstering foreign reserves. This influx of remittances is particularly crucial for countries like Somalia and Ethiopia, where labor migration to the GCC is prevalent and serves as a key economic lifeline.

“In conjunction with the economic diversification strategy, the GCC’s intensified engagement in Africa is also motivated by the imperative to secure natural resources and enhance geopolitical influence,” it stated.

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The report said Africa’s rich array of natural resources, particularly critical minerals necessary for renewable energy technologies, serves as a significant draw for GCC investments that aim to bolster long-term economic resilience.

“By cultivating robust economic partnerships, GCC countries endeavor to amplify their geopolitical presence on the continent, establishing themselves as pivotal stakeholders in Africa’s developmental trajectory,” it said.

The report added that Kuwaiti investments in Africa are valued at approximately $28 billion, targeting areas like renewable energy and infrastructure, particularly in Egypt and Nigeria.

“These efforts highlight Kuwait’s commitment to sustainable development in Africa and its economic diversification goals. Kuwait’s African engagement is primarily facilitated through the Kuwait Investment Authority and the Kuwait Fund for Arab Economic Development (KFAED).

“Since its establishment in 1961, KFAED has significantly financed development projects across Africa, expanding its focus to non-Arab countries in 1974, with about 50 percent of its operations now on the continent,” it said.

The report cited infrastructure, agriculture, energy, telecommunications, education, and healthcare as key sectors.

The Gulf Cooperation Council countries have markedly intensified their involvement in Africa’s telecommunications landscape through a series of strategic investments and collaborations.

The report said the UAE’s E& (formerly Etisalat) has established a robust operational footprint across the continent, with active services in multiple countries, including Benin, Burkina Faso, the Central African Republic, Egypt, Gabon, Ivory Coast, Niger, Nigeria, and Morocco.

“Additionally, Zain, headquartered in Kuwait, boasts a significant market presence, particularly in Sudan and South Sudan, focusing on advancing mobile and data services.

“Meanwhile, Qtel, based in Qatar, has deployed its telecommunications infrastructure in Algeria and Tunisia, enhancing connectivity and service offerings in these North African markets,” the report added

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