UAE’s Overseas Investments Soars to Estimated US$2.5 Trillion by 2024

As of early 2024, the UAE’s overseas investments have surpassed US$2.5 trillion, solidifying its position as a leading global player in FDI. Among these investments, one landmark deal is the historic US$35 billion investment agreement with Egypt for the development of Ras Al Hekma.

By Lucia Brancaccio

At the beginning of 2024, the United Arab Emirates (UAE) firmly established itself as a leading global player in foreign direct investments (FDI). By the first few months of this year, the total value of Emirati overseas investments, encompassing both government and private sectors, stood at an estimated US$2.5 trillion. This places UAE at the forefront among nations in the Arab region and West Asia, and second globally in investing in new opportunities.

This positive performance in overseas FDI establishes the UAE as a pivotal player on the global economic stage.

The UAE’s international economic engagements are evident through its active participation in various strategic partnerships, alliances, cross-border deals, and acquisitions.

Key markets for UAE overseas investment

H.E. Jamal Saif Al Jarwan, Secretary-General of the UAE International Investor Council (UAEIIC), revealed that the UAE’s global investment reach currently extends to 90 countries. In his recent declaration, key investment destinations highlighted include:

• The United States, which tops the list, and where the UAE has made substantial investments totaling US$65 billion in bonds and US$50 billion in FDI. This accounts for more than half of Abu Dhabi Investment Authority’s assets.
• Following closely is Egypt with around US$65 billion in investments.
• UK and India each pull in US$40 billion in FDI.
• Morocco received US$30 billion in investments.

Spotlight: UAE investment in Egypt’s Ras Al Hekma project

Al Jawan placed particular emphasis on Egypt during his speech, highlighting the UAE’s recent landmark deal with the country for a US$35 billion investment for the development of the Ras Al Hekma project.

This partnership marks the largest direct investment in Egypt’s history, propelling the total UAE investments in the country to an estimated US$65 billion upon project completion, underscoring a shift in the regional investment landscape and reflecting newfound confidence in Egypt’s economic prospects.

The UAE’s involvement in Egypt, and its support to the country, has intensified since Russia’s invasion of Ukraine exposed long-standing vulnerabilities in the North African nation’s debt-ridden economy.

In particular, building on a series of investments dating back to 2022, Abu Dhabi’s ADQ emerged as the principal stakeholder in two of Egypt’s top three listed companies, namely Commercial International Bank and Eastern Tobacco Company. Now, ADQ investment and holding company are also spearheading the Ras Al Hekma project, offering significant short-, medium-, and long-term benefits to the Egyptian economy.

Project impact on Egypt

The impact of the project is multifaced. Immediate advantages include the strengthening of the Egyptian pound, stabilizing supply chains, and normalizing prices. Moreover, the deal places Egypt as a leading destination for FDI, likely boosting its ranking in the upcoming UNCTAD report. This signifies increased international confidence in Egypt’s potential, setting the stage for heightened FDI inflows in the coming years.

Deepening of strategic and economic partnership

The Ras Al Hekma project not only represents a unique opportunity for Egypt but also holds significant strategic benefits for the UAE, serving as a gateway to fortify its influence in the region. By signing this deal, both nations deepened their strategic and economic partnership, fostering enhanced cooperation in investments and infrastructures. This also aligns with the UAE’s overarching strategy of leveraging FDI to reach global leadership and promote sustainable regional development.

By adhering to the “win-win formula,” the UAE’s economic support for this project is poised to yield remarkable results for the country itself. Beyond bolstering regional influence, the UAE stands to generate revenues from its investments through 2,000 Emirati companies currently operating in the area across various sectors, such as telecommunication, real estate, oil and gas, among others.

Outlook for UAE ODI

Over the past few decades, UAE’s outbound direct investments (ODI) have exhibited an upward trajectory, boding well for the Emirates’ sustained growth.

Looking ahead, Al Jarwan expressed optimism regarding the future of UAE investments in Egypt. In particular, he stressed the importance of specificity and a thorough understanding of the Egyptian economy in ensuring successful investments, highlighting factors that encouraged injecting foreign currency and stimulating the economy in emerging markets.

Furthermore, Al Jarwan also announced UAE’s intention to expand its economic engagement in the coming years, with plans to diversify its investment portfolio across a widening array of nations.

Among the countries of interest to the UAE in this regard are India, Indonesia, ASEAN nations, Morocco, certain European countries, and Türkiye.

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