MONEY

The UAE has carefully crafted a position for itself as a hub for digital assets. Can the good times last?

The United Arab Emirates (UAE) positions itself as a center for digital assets, a market that may be worth up to $500 billion over the next few years by some estimates. Dubai and Abu Dhabi are already acknowledged as global hubs, based not only on quality of regulatory oversight but their early strategic bet on tokenization as the basis of a new financial infrastructure.

But the UAE’s pioneering moment may soon end. The US-Israeli war against Iran, launched in February, has sown doubts as to whether the Persian Gulf monarchies are the haven of stability they claim to be. And for all the regional talk of tokenization and fintech, longestablished financial centers elsewhere are taking the lead in drawing up a unified set of rules to govern crypto regulation. If a clear regulatory framework emerges, it could reshape crypto market dynamics at the UAE’s expense.

In January, the New York Stock Exchange (NYSE), the world’s largest financial market, said it was launching a platform for 24×7 trading and on-chain settlement of tokenized securities, a development some analysts predict will spark a revolution in capital markets. The move by NYSE could leave some other financial centers behind as liquidity and institutional investors shift to more efficient, always-on markets.

Financial centers, including London, Singapore, and Hong Kong, are also evaluating tokenization.

And other Gulf Cooperation Council (GCC) member states, notably Saudi Arabia, Qatar, and Bahrain, are increasingly embracing tokenization, backed by financial war chests of various sizes.

Management consultancy Kearney earlier this year estimated that by 2030, close to $500 billion of assets across the GCC could be placed on-chain, the most fertile ground being in private markets, public equities, funds of tokenized sovereign wealth fund (SWF) assets, commodities, real estate, and bank deposits. Tokenizing these assets would unlock some of the GCC’s most prized but difficult-to-access holdings, such as SWF assets and family offices. Tokenizing listed securities, for example, could simplify cross-border transactions and open markets to fractional ownership, a move likely to attract global investors looking to participate at smaller ticket sizes.

UAE real estate is already on the road to wider tokenization. Last year, Dubai launched a real estate tokenization sandbox pilot, the first regulatory body in the region to adopt blockchain-based tokenization for fractional ownership. The initiative coordinates with the emirate’s Virtual Assets Regulatory Authority (VARA), which monitors issuance, trading, and custody, together with the Central Bank of the UAE, which ensures compliance with national financial regulations.

For some analysts, the holy grail would be the tokenization of the GCC’s oil output. In January, Bahrain and UAE-based Gulf Energy Exchange announced plans for the first oil-backed stablecoin, aptly named OIL1, subject to regulatory approval by the Central Bank of Bahrain (CBB). OIL1 is to be collateralized by verified reserves of Persian Gulf crude oil and pegged to the US dollar, creating a link between the energy sector and digital assets.

Regulatory Oases

To stay competitive, however, the UAE will need to continue innovating, given that adoption of tokenization and digital assets is moving at breakneck speeds. Tokenization’s market growth “looks like an express ride to the top of the Burj Khalifa,” Kearney noted, a reference to the world’s tallest building, located in Dubai.

Dubai and Abu Dhabi operate offshore free-zone financial centers—the Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM)—both of which have taken leading roles in ensur ing the UAE remains at the forefront of digital-asset innovation, says Jason Barsema, president and co-founder of Chicago-based Halo Investing. “The UAE’s ascendancy as the destination for digital assets is rooted in a unique policy-to-production approach that separates it from purely speculative markets,” he notes.

The UAE’s Securities and Commodities Authority offers a comprehensive regulatory regime straddling the central bank while Dubai’s onshore VARA, Abu Dhabi’s Financial Services Regulatory Authority (FSRA), and the Dubai Financial Services Authority (DFSA), which are offshore entities, operate at the local emirate level.

This regulatory landscape gives international investors a degree of comfort that governance standards are aligned with global legal standards. Its core advantage is a sophisticated yet “pragmatic regulatory architecture that offers something most emerging markets still lack: clarity,” says Shivkumar Rohira, CEO of EMEA at financial services firm Klay Group.

“Dubai’s VARA, alongside the DFSA in the DIFC, has built a tiered, activity-based framework that sets out clear permissions for exchanges, custodians, and token issuers, while tightening standards around AML, investor protection, and market integrity,” he adds.

Abu Dhabi’s ADGM has gone further in positioning itself as an institutional-grade venue with a regime that accommodates tokenized securities, funds, derivatives, and increasingly, staking, among other yield-generating activities.

“This integration keeps Dubai and Abu Dhabi the default GCC base for global digital-asset players even as regional rivals race to catch up,” says Rohira.

Even within the UAE, however, there are fundamental differences of approach between Dubai and Abu Dhabi, notes Martin Leinweber, director of Digital Asset Research and Strategy at MarketVector. The result is a layered system that gives firms the flexibility to structure licensing around their business model, not the other way around.

“What strikes me most from an institutional perspective,” Leinweber says, “is how deliberately the UAE constructed its regulatory architecture at a time when most major financial centers were still debating whether crypto deserved a framework at all.”

In creating VARA, Dubai established a purpose-built regulator with its own mandate, rulebooks, and enforcement capacity rather than grafting virtual asset oversight onto an existing regulator. In comparison, Abu Dhabi took a complementary path through ADGM’s FSRA, he notes.

Other GCC States Wake Up

While the UAE may be in the lead, other GCC states are finding a place for tokenization in their financial markets as well.

Bahrain’s regulatory framework is closest to the UAE’s, but with the CBB as sole authority for virtual assets. That includes a regulatory sandbox where firms can test and modify digital asset models; Rain was the first crypto-asset firm to be accepted into the program, in 2017.

Bahrain FinTech Bay, the island kingdom’s fintech center, acts as an incubator, bringing together startups, regulators, and financial institutions.

Qatar is taking a more gradual approach; the Qatar Financial Center (QFC) is over seen by the QFC Regulatory Authority, which has recognized tokenized assets, custody, and transfer within a virtual assets framework under the QFC’s jurisdiction.

The GCC’s largest economy, Saudi Arabia, remains underdeveloped when it comes to digital asset readiness, Kearney found, but the authorities have signaled openness to some use cases, including tokenized deposits and stablecoins. Further announcements are expected this year as tokenization becomes embedded in regional capital markets. The Kingdom is home to the buy-now-pay-later juggernaut Tabby, which was valued at $4.5 billion following a recent secondary share sale.

Oman, which recently announced it was establishing a financial center, is moving toward a digital assets framework under the auspices of the Central Bank of Oman, in compliance with existing AML standards. Conversely, Kuwait has adopted the GCC’s most restrictive digital assets policy. Several crypto activities increasingly accepted in other markets, including payments, trading, mining, and tokenization, are banned. The government cites market stability and risk as the primary reasons; the Kuwaiti stock market has a history of instability and volatility.

Although the NYSE threatens to jump ahead of the competition, it has done so against a backdrop of regulatory uncertainty; there is yet to be a definitive set of laws as to how tokenized assets are classified, issued, held, and traded in the US. Dubai and Abu Dhabi may be ahead of that curve, but even they have work to do to allay wider concerns, as does the rest of the GCC.

Those concerns, underscored by the conflict with Iran, center around the question of whether the GCC is a long-term stable environment for global investors. And with the US on the cusp of approving the CLARITY Act, creating a comprehensive regulatory framework for digital assets, and Europe moving toward unified regulation, investors may prove more inclined to opt for the safety of more established financial markets. If so, the UAE’s outsized position in the digital assets market may not be as secure as it would like.

Still modest in size, the regional private credit market is growing fast, boosted by sovereign capital and regional and global direct lenders.

Private credit—nonbank lending to business—is a long-established practice in the US and Europe. Globally, the market has exploded from approximately $300 million in 2010 to a projected $2.8 trillion by 2028.

In the Gulf Region, the private credit market is still in its early stages. Yet a combination of structural forces is accelerating its growth.

“The GCC [Gulf Cooperation Council] essentially offers investors emerging-market growth opportunities with quality fundamentals that outrank advanced economies,” says Dino Kronfol, head of Global Sukuk and MENA Fixed Income at Franklin Templeton. “Efforts to further diversify economies and mobilize domestic and foreign investment will create enormous opportunities in financial services.” Franklin Templeton was one of the first global leaders in asset management to open an office in Dubai, in 2004.

Governments across the GCC are implementing ambitious diversification strategies to reduce their reliance on oil and gas revenues. A pillar of these strategies is private-sector activity, and the expansion of small to midsized enterprises (SMEs) in particular.

But access to funds is a challenge. Local banks focus primarily on large infrastructure and state-backed projects while regulatory capital requirements limit their appetite for riskier lending. Capital markets also remain relatively underdeveloped. As a result, SMEs account for less than 10% of total lending in the GCC, compared to roughly 20% in developed countries. The lending gap is more than $250 billion, and private credit is increasingly viewed as one way to close that gap.

The growth of the GCC private credit market is ultimately supported by sovereign capital, global credit managers seeking new opportunities, and a growing group of regional direct lenders focused on mid-market companies. Future growth will depend on demand from corporates, but also on economic conditions—and security—in the Gulf.

“Recently, times have been challenging, with the Strait of Hormuz blockage, oil at $100 a barrel, and hostilities continuing,” says Mirza Beg, partner and co-CIO at Ruya Partners, a private credit fund manager headquartered in the Abu Dhabi Global Market (ADGM). “But we don’t expect the longer-term story of regional private credit growth to derail because of that.”

Global Slowdown To Regional Opportunity

The sector truly began gaining traction as fundraising conditions worsened in Western markets. Following the Covid-19 pandemic, higher interest rates and rising capital costs disrupted the traditional private-equity cycle of invest, exit, distribute, and redeploy, leaving many investors struggling to raise new funds.

“Obviously, they started showing up a lot in this region,” Beg observes. “This coincided with allocators here, especially the sovereigns, starting to change their mindsets and basically saying to everyone: We’ve been exporting capital for so long. You guys have made a lot of money using it. Now we want this capital to be invested to help develop our countries as well.”

Backed predominantly by sovereign and sovereign-linked funds in the United Arab Emirates and Saudi Arabia, Ruya Partners’ fund strategy focuses on investing in mid-market companies, so far deploying roughly half of its capital in the UAE and half in Saudi Arabia.

An ecosystem has begun to take shape. According to a recent PwC study, private credit in the Gulf and Egypt could grow at a compound rate of 15% to 30%, reaching between $11 billion and $20 billion by 2030.

“Recently, times have been challenging … But we don’t expect the longer-term story of regional private credit growth to derail.”

Mirza Beg, Ruya Partners

“Activity picked up about five years ago, with approximately $5 billion underwritten over that time frame,” Kronfol notes. “While encouraging and witnessing rapid growth, the amounts pale in comparison to public bonds, sukuks, and syndicated loans issuance, which exceeded $315 billion in 2025.”

A Growing Cast Of Players

So far, deal flow remains relatively modest, but it is increasing. Some of the larger transactions have involved real estate projects or fintech platforms like Tamara in Saudi Arabia and CredibleX in the UAE. Most deals, however, are smaller—typically under $50 million—and target midmarket companies in sectors like retail, healthcare, logistics, and transportation.

Global asset managers are moving quickly to establish a presence in the region’s key hubs. Abu Dhabi has attracted US firms, including Apollo Global Management, Blackstone, and Davidson Kempner Capital Management while Dubai hosts such players as Oaktree, Ares Management, and Blue Owl. Other entrants include UK’s Janus Henderson Investors and Hong Kong-based SC Lowy.

Many of these firms focus primarily on raising capital and keeping a close relationship with sovereign wealth funds (SWFs) rather than funding local deals, which are often too small for their mandate.

Mid-market lending is therefore largely the domain of regional managers. Firms including Ruya Partners, Shuaa Capital, Jadwa Investment, and Amwal Capital Partners are setting up regional funds, typically between $100 million and $250 million in size. Latest in line: Saudibased Jadwa Investment’s $200 million private credit fund, launched in January. Last May, Amwal Investment, an alternative investment firm based in Dubai and Riyadh, started a $150 million Shariacompliant private credit fund targeting 10 to 15 deals annually, with a focus on technology-enabled platforms.

Another defining feature of the Gulf private credit market is the strong role of SWFs: some of the largest in the world. Over the past decade, GCC sovereign funds have been investing in private credit globally, through partnerships with asset managers or by setting up their own structures. In the UAE, Mubadala has reportedly committed over $20 million to private credit strategies worldwide. The Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund are also increasing their exposure.

Family offices are starting to follow as they look to diversify their holdings and earn a nice yield. But allocations remain small, typically around 2% of portfolios.

Another difference is that while developed markets in Europe and the US tend to be sponsor-led, typically financing leveraged buyouts orchestrated by private equity firms, in the Middle East, the market is more focused on direct lending to companies seeking growth capital.

“The biggest difference is the absence of a dynamic private equity industry that sponsors transactions, placing a heavier burden on private credit managers to originate deals,” Kronfol notes.

A Gulf private credit investor “has to do a lot of the work that the private equity sponsors would do in the developed markets,” says Ruya Partners’ Beg, “which means it generally takes longer to get deals closed. But at the same time, you can drive deal terms better. In the developed markets, it ends up being a lot more commoditized, a lot more competition.”

Although still nascent and focused on senior lending and subordinated capital, including mezzanine debt and capital appreciation vehicles, the Gulf private credit market is becoming increasingly sophisticated, “transitioning toward more specialized and targeted product offerings such as special situations and distressed debt,” the PwC study notes.

Another distinctive feature is the role of Islamic finance. Sharia-compliant structures are becoming an important niche within private credit, and international managers are increasingly exploring the opportunity. In November, Janus Henderson launched a Sharia-compliant private credit strategy targeting the region.

Regulation Fuels Growth

Regulation also plays a critical role in supporting the sector’s development. Most private credit investment firms operating in the Gulf are based in offshore financial centers like the ADGM or the Dubai International Financial Center (DIFC), where the legal system is modeled on English common law.

The number of asset managers licensed in Dubai increased 35% between 2020 and 2023, DIFC data shows, with private credit strategies accounting for a substantial share of this growth. Both the DIFC and ADGM introduced dedicated regulatory frameworks for private credit funds— in 2022 and 2023, respectively—aiming to attract more international players and support the growth of the asset class.

“We structure all of our financing arrangements within the offshore financial centers, but what’s really interesting is that the onshore regime is also moving toward Western legal regimes,” Beg observes, citing the evolution of local laws on such matters as floating charges or bankruptcy.

Despite the growth of private credit, banks remain dominant lenders in the region. Many GCC banks currently view private credit firms as rivals and are moving to launch their own offerings. Over time, however, the more likely scenario is that—as was the case with fintech—banks will find it more advantageous to collaborate rather than compete.

Multiple global forces are rewriting D&O risk, from political, economic, and social volatility to AI-related liabilities.

Corporate directors and officers are operating in a more complex environment than at any point in the past decade, and their insurers are working to keep up.

“Coverage is broadening,” says Mark Sutton, senior equity partner at Clyde & Co., a global law firm headquartered in London and known for its deep specialization in insurance, risk, and regulatory matters. “We’re slowly seeing D&O policies evolve to reflect a more complex regulatory environment, and underwriting discipline is tightening.”

Regulators, meanwhile, are stepping up their pursuit of corporate misconduct. Personal exposure for directors and officers has widened and, with rising legal costs and collective actions, D&O premiums are nudging upward. In some regions, the long trend of price decline shows signs of flattening, or in some instances even reversing.

Regulatory pressures will vary across regions.  For example, in the UK, scrutiny of ESG and AI disclosures is intensifying, and in the US, enforcement actions by the US Securities and Exchange Commission are on the rise.

But board‑level exposure is also being reshaped by geopolitical turbulence, economic uncertainty, and the growing influence of new technologies, says Jarrod Schlesinger, global head of Financial Lines and Cyber at Allianz Commercial. Geopolitics has become a core focus for boards and executive leadership teams worldwide.

“Political, economic, and social volatility across regions is affecting supply chains, capital flows, regulatory regimes, and operational continuity,” says Schlesinger. “Armed conflicts, sanctions, cyberattacks, and trade disputes are now routine considerations for multinational companies.” Heightened volatility leaves companies and their leaders exposed to a variety of operational, financial, and reputational threats, many of which could trigger litigation.

Europe: Intensifying Scrutiny

This dynamic is especially pronounced in Europe, says Schlesinger, as companies navigate risks tied to international sanctions and politically unstable regions: “Geopolitical instability is also amplifying cross‑border compliance exposure and driving significant D&O losses, particularly in Europe and the UK.”

Corporate insolvencies—a major driver of D&O claims, particularly for private companies—are set to rise again in 2025 and 2026. According to Allianz Trade, global business insolvencies rose 10% in 2024, ending the year 12% above pre‑pandemic levels. Allianz Trade’s Global Insolvency Report, published last month, estimates they climbed a further 6% in 2025 and forecasts a 5% increase in 2026, marking a fifth consecutive year of increases.

“Financial distress typically intensifies scrutiny of board decision‑making and capital allocation,” says Schlesinger.

Shareholder activism is also reshaping the D&O landscape, he adds, as “derivative litigation” expands both in frequency and severity. Such actions now number in the dozens each year, he says, and often track securities class actions alleging breaches of fiduciary duty. Beyond traditional accounting‑related disputes, he points to the rise of event‑driven claims, with M&A activity, regulatory enforcement, workplace and consumer issues, and other operational shocks increasingly acting as triggers for D&O suits.

Another factor impacting D&O insurance in Europe is the evolving landscape of ESG-related liabilities.

As more countries introduce ESG reporting mandates, directors and officers are increasingly exposed to the costs associated with investigations, enforcement actions, and potential fines for non-disclosure or misrepresentation. The regulatory pressure can lead to claims from private litigants dissatisfied with disclosures regarding a company’s ESG commitments.

“Expanding disclosure and reporting regimes—particularly in Europe and other major markets—are elevating expectations around transparency, climate strategy, supply chain oversight, human rights, and workforce governance,” Schlesinger says. “ESG considerations are increasingly systemic, intersecting with enterprise risk management, capital strategy, and stakeholder engagement.”

Non-accounting securities class actions have more than doubled over the past decade, he adds, and environmental and product-related controversies, including emerging risks tied to “forever chemicals,” have produced costly litigation and substantial settlements.

AI Risk Arrives

Against this backdrop, another major emerging exposure is the widening gap between what companies claim about their AI capabilities and what they are implementing, a misalignment that can spur regulatory scrutiny, securities litigation, and shareholder actions.

“Boards are increasingly accountable for a widening set of AI‑related risks,” says Beena Ammanath, executive director of the Global Deloitte AI Institute, “from model inaccuracies and hallucinations to IP leakage, privacy breaches, bias, ethical lapses, and cybersecurity exposure: all of which carry growing legal and regulatory consequences.” With weak governance, she warns, these issues can “quickly lead to reputational damage.”

Scrutiny is now extending to another fast‑emerging hazard, Ammanath adds: AI‑washing, where companies misrepresent their use of AI to appear more advanced or innovative than they are. This often takes the form of vague “AI‑powered” claims without evidence, inflated descriptions of automation or risk controls, or the masking of manual processes behind the language of machine intelligence.

“We’re seeing an uptick in scrutiny in this area,” Ammanath says. “As a result, many executives and their boards are pushing harder for stronger governance, testing, and human oversight.”

How Companies Are Limiting Risk

As the risk environment grows more complex, boards are increasingly compelled to reevaluate the scope and substance of directors’ and officers’ obligations.

“Boards are strengthening governance and improving disclosure practices while also investing in more robust risk oversight,” says Sutton. “This is particularly the case with ESG and technology.”  Many are enhancing their scenario planning and crisis response capabilities to manage regulatory and geopolitical shocks.

Insurers, for their part, are collaborating more closely with clients to improve transparency, refine risk controls, and tailor coverage to emerging exposures, Sutton adds, with the emphasis shifting toward proactive risk management.

Given the increasingly complex global risk landscape, Schlesinger urges companies to “further integrate geopolitical intelligence and business‑impact analysis into their broader risk management, strategic decision‑making, supply‑chain resilience, and cyber security frameworks.” To this end, he recommends that corporate risk managers work closely with their insurance partners to identify and mitigate their risk exposures.

“It’s important to maintain open communication with internal and external stakeholders to navigate these complex and evolving risks effectively,” he says. Furthermore, with litigation, financial penalties, and reputational damage all potentially resulting from AI strategy, “businesses should consider proceeding deliberately, especially with regard to decision-making and disclosure.”

When it comes to AI accountability, Ammanath says, companies can reduce risk to boards and officers by establishing a formal AI governance program that provides clear board oversight and defined accountability across the AI lifecycle. “They can also embed responsible AI practices into processes and training as well as model risk management that includes risk assessments, validation, and continuous monitoring.”

Taken together, these primary forces are reshaping both the expectations corporate leaders face and the liabilities that follow. Boards are being asked to demonstrate sharper judgment, stronger governance, and more credible oversight at a time when regulators, investors, and insurers are scrutinizing decisions with unprecedented intensity.

Regulatory investigations and claims activity continue to rise across major markets, adding further pressure to a sector where years of premium declines are now flattening out and, in some regions, have begun to reverse. D&O insurers, for their part, are tightening underwriting discipline, engaging more deeply with clients to improve transparency and risk controls, and tailoring coverage to emerging exposures.

War in Iran and US tariffs are destabilizing global trade. But commerce hasn’t slowed; it’s simply rerouting.

As last fall’s G20 summit closed in Johannesburg, the United Arab Emirates announced plans to inject up to $1 billion in AI infrastructure funding across Africa. The pledge is the latest in a growing wave of investment from the Gulf Cooperation Council states that signals a broader shift.

Together, the Middle East and Africa represent roughly 2 billion consumers and a combined GDP of more than $5 trillion. Investment and trade spanning the regions are already accelerating. GCC countries have deployed over $100 billion in Africa and bilateral trade grew at an annual rate of about 8% between 2021 and 2022, reaching $154 billion.

Europe and China remain the continent’s largest capital providers, but the Gulf states are closing the gap. As war, supply-chain disruptions, and new US tariffs reshape global trade, countries across the MENA region see an opportunity to position themselves as the logistical and financial bridge linking Asia, Europe, and Africa.

Gateways And Corridors

The two natural points of entry are Egypt and Morocco. They have a foot in both regions and long experience navigating between the Arab world and the African continent.

Egypt acts as a gateway to East Africa, with commercial routes extending toward Sudan, Kenya, and Uganda. Morocco has established itself as a hub for west Africa, leveraging decades of political and economic ties with francophone markets. Businesses from both countries are expanding across the continent in sectors including food processing, manufacturing, pharmaceuticals, chemicals, telecoms, and technology.

Over the past decade, the Gulf states have also steadily expanded their presence, deploying capital through longterm strategic investments to reshape Africa’s trade routes while securing access to land, natural resources, and fast-growing markets.

Gulf investors are targeting corridors along the Red Sea and the Horn of Africa, including the Berbera–Ethiopia trade route and points of access to the Indian Ocean, the Atlantic, and the Mediterranean. Their aim is to anchor supply chains that direct African trade through Gulf logistics hubs before it reaches global markets.

“The GCC is becoming more and more of a trade hub for Africa,” says Tarek El Nahas, group head of International Banking at Dubai-headquartered Mashreq Bank. “We’ve got a lot of clients that have their regional operations here for both Middle East and Africa.”

Infrastructure is central to these developments. The UAE and Saudi Arabia are investing heavily in ports, logistics hubs, and industrial zones, laying the foundations for new Global South supply chains.

The UAE is by far Africa’s largest Gulf stakeholder. Dubai’s DP World and Abu Dhabi Ports have secured concessions to operate and develop ports in Algeria, Egypt, Somalia, Somaliland, Tanzania, South Africa, Guinea, Senegal, Sudan, the Democratic Republic of Congo, Mozambique, Congo-Brazzaville, Eritrea, Rwanda, and Niger.

Air connections are also an investment target, with Qatar Airways supporting several African airlines including South Africa’s Airlink while Doha in 2019 acquired 60% of Rwanda’s new international airport.

Telecom operators such as Qatar’s Ooredoo and the UAE’s e& (formerly Etisalat) support cable infrastructure and data centers and have signed partnerships with local providers like Maroc Telecom as part of a plan to reach several dozen countries across the continent by 2030.

In light of the recent Iranian attacks on GCC infrastructure, UAE and Saudi Arabia are also considering shifting some AI assets to secure locations in Africa. Abu Dhabi’s G42 is already building a $1 billion data center in Kenya.

Commodities, Food, And Energy

What, then, are these closely connected regions trading? Exchange often begins with natural resources.

Oil and gas dominate Gulf exports to Africa, while the continent supplies metals. Gold is a major African export to the UAE, already a hub for precious metals and stones; Gulf investors are also targeting rare metals and minerals critical to energy transition and AI supply chains.

Deal activity reflects this shift. Last year, Abu Dhabi-based International Resources Holding acquired 51% of Zambia’s Mopani Copper Mines for $1.1 billion. Saudi Arabia’s Maaden Holding, through Manara Minerals, is pursuing similar deals in Zambia and elsewhere.

These ventures sometimes feed Western markets. In November, the US and Saudi Arabia agreed to cooperate on mineral supplies to reduce reliance on China, and in March, US-based Cove Capital and Saudi Arabia’s AHQ announced a “multibillion dollar” fund to invest in African minerals including cobalt, copper, lithium, and rare earths.

Renewable energy is another focus. The UAE’s Masdar has committed $10 billion to African clean energy projects by 2030, backing solar projects in Angola, Uganda, Zambia, and Mozambique. Late last year, Saudi Arabia’s Acwa Power signed a deal with the African Development Bank to invest up to $5 billion in renewable energy and water systems in countries including South Africa, Egypt, and Morocco.

Food security is also a major driver for GCC countries, which buy over 80% of their comestibles from abroad. The UAE and Saudi Arabia import agricultural products and livestock from across Africa while investing in farmland and production projects to secure long-term supply. Qatar has made important commitments in North African countries, including a $3.5 billion dairy farm in Algeria.

North African manufacturers, meanwhile, are increasingly targeting African markets. Egyptian pharmaceutical companies, for example, have become major exporters across the continent.

Regulatory challenges and logistical bottlenecks persist, but African trade integration is supported by a growing web of multilateral agreements. Regional frameworks including the Common Market for Eastern and Southern Africa (COMESA), the Agadir Agreements, and the African Continental Free Trade Area (AfCFTA)— launched in 2021 and designed to unify a market of 1.5 billion people—facilitate investment and commercial exchange.

Several countries also benefit from US and European trade preference programs such as the African Growth and Opportunity Act (AGOA), which allows some 30 African economies to export certain goods to the US duty-free. These arrangements make parts of Africa and MENA increasingly attractive as manufacturing and re-export bases for companies seeking to access Western markets.

“We’re starting to see more companies from Asia, for example, setting up a presence in the MENA region to benefit from a lower tariff environment, and I think Egypt will become a big beneficiary in terms of manufacturing,” El Nahas says.

Financing The Corridors

Moroccan and Egyptian banks have taken the lead in cross-border expansion, financing trade and infrastructure projects across the continent. Most international lenders, by contrast, maintain a limited on-the-ground presence in Africa but operate through regional hubs that circle the continent, notably in Morocco, Egypt, Nigeria, Kenya, and South Africa.