Valentino Chigwedere, CEO, African Energy and Economic Youth Council.
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Since the end of apartheid, South Africa’s economic partnerships have been premised on trade and investment flows dominated by China, the United States and the European Union, while the country’s industrial base, financial markets and relative political stability positioned it as Africa’s most sophisticated economy.
That landscape is gradually evolving, with persistent electricity shortages, deteriorating logistics infrastructure, crime, corruption and years of sluggish growth having weakened South Africa’s investment appeal. In parallel, shifting geopolitical dynamics are prompting Pretoria to diversify its external economic relationships. In this context, the growing presence of Gulf capital in the South African economy is less reflective of a sudden investment boom and more the quiet reconfiguration of international partnerships.
Energy reform attracting new investors
South Africa’s electricity crisis has become one of the country’s most visible structural constraints, affecting industrial output and investor confidence alike. Against this backdrop, the gradual opening of the energy sector to private generation has therefore created opportunities for foreign developers.
Renewable energy projects backed by Gulf investors illustrate this trend. Dubai-based AMEA Power is involved in several solar projects, including the 120 MW Doornhoek photovoltaic plant, which will supply electricity to the national grid under a long-term power purchase agreement with Eskom.
Beyond power generation, Gulf investors are also exploring opportunities tied to South Africa’s broader infrastructure and resource base. Abu Dhabi-based International Resources Holding has signed an agreement with the country’s Public Investment Corporation to explore investments in logistics infrastructure, mining and green energy projects.
For investors from the Gulf, these sectors combine two strategic priorities: infrastructure development and access to the mineral resources increasingly required for the global energy transition.
Resources, industry and strategic positioning
Saudi Arabia’s expanding presence in South Africa reflects similar considerations. Projects linked to platinum group metals processing in Limpopo demonstrate how South Africa’s mineral wealth intersects with the Kingdom’s broader industrial ambitions.
At the same time, Riyadh is exploring cooperation in emerging energy sectors. A memorandum of understanding between ACWA Power and South Africa’s Industrial Development Corporation envisages developing a green hydrogen industry, positioning the country as a potential future supplier in a rapidly evolving global market.
Saudi capital has also begun to enter South Africa’s established industrial landscape. The takeover of the industrial group Barloworld by a Saudi-led consortium in early 2026 highlights a growing willingness among Gulf investors to engage directly with the country’s corporate sector.
Connectivity and the architecture of trade
Transport and connectivity form another dimension of this emerging relationship. Qatar Airways’ acquisition of a 25 percent stake in the regional airline Airlink reflects a strategy aimed at strengthening aviation links between southern Africa and global transport networks centred in the Gulf. It equally aligns with Doha’s focus on transport and aviation investments, as key facets for its African engagement strategy.
With flights to more than forty destinations across fifteen African countries, Airlink plays a key role in regional connectivity, making the partnership an entry point into the broader dynamics of trade and mobility across southern Africa. Despite its potential contribution towards propelling the growth of South Africa’s tourism industry, there are concerns that Qatari involvement will give Airlink an unfair advantage compared to local carriers, including South African Airways and FlySafair.
Diversification in an uncertain global environment
The arrival of these relatively new economic partners has been broadly positive, with official sources reporting that trade between South Africa and the United Arab Emirates has expanded significantly in recent years, with non-oil trade reaching roughly USD 8.5 billion in 2024, making the UAE Pretoria's second-largest trading partner on the continent. In parallel, Abu Dhabi and Riyadh had investment stocks of USD 1.3 billion and USD 1.4 billion, respectively, in 2024.
Nevertheless, the involvement of Gulf-based firms in strategic sectors, including energy, logistics and aviation, has raised concerns about sovereignty and the potential favouring of foreign companies over local ones, while some of the MoUs showed little progress, such as those signed by IRH and ACWA Power with government entities.
Yet the significance of Gulf engagement lies less in individual projects than in what it reveals about South Africa’s evolving economic diplomacy. Amid an increasingly volatile geopolitical climate, Gulf economies are emerging as pragmatic investors capable of deploying capital in sectors such as energy and logistics. These are central to South Africa’s reform agenda, with Gulf investment interest exemplifying the current coalition government's efforts to improve the business environment.
In parallel, despite souring relations with the US, and traditional partners increasingly focusing on domestic and more geostrategic issues, South Africa is also taking steps to maintain these ties. This has been pursued with the understanding that, despite the importance of these emerging relationships, they will not completely fill the void
Whether this growing relationship will translate into sustained economic transformation remains uncertain, particularly as it is unclear whether Gulf states will maintain this investment trajectory amid the outbreak of war in the Middle East. But it already illustrates a broader shift: South Africa’s economic future is increasingly shaped by partnerships that extend beyond its traditional geopolitical orbit.
Chigwedere is CEO of African Energy and Economic Youth Council