Saudi-African summit kicks off today with multi-million dollar development projects for Africa

$20 bn trade turnover recorded in 2023
Saudi-African summit kicks off today with multi-million dollar development projects for Africa
Part of the Saudi-Arab-African Economic Conference (Photo Credit: SPA)

The Saudi-African summit is set to launch today in Riyadh, with the objective of establishing strategic cooperation in various areas including economics, investments, politics, security, and culture. The summit’s overarching goal is to advance shared interests, foster development, and promote stability between the two parties.

Prior to the summit, the Saudi-Arab-African Economic Conference took place. This conference served as a platform for the Kingdom to express its support for the African continent, recognizing its significance in driving global economic growth.

Read more: Saudi, South Africa strike $15 bn worth of agreements

In 2023, the trade volume between Saudi Arabia and African countries reached SAR74.735 billion (roughly $20 billion). Of this total, exports accounted for SAR53.071 billion ($14 billion), while imports amounted to SAR21.664 billion ($5.8 billion).

SAR49.5 billion

Over the past decade, Saudi’s investment in African countries has reached a cumulative total of SAR49.5 billion. Moreover, the number of Saudi companies operating in various sectors such as renewable energy, food and beverages, business services, financial services, and consumer products has reached 47.

The endeavors of Saudi Crown Prince Mohammed bin Salman bin Abdulaziz during the Kingdom’s presidency of the G20 in 2020 played a crucial role in the establishment of the G20 Debt Service Suspension Initiative and the G20 Common Framework for Debt Treatments. These initiatives effectively provided immediate liquidity to 73 of the world’s most impoverished nations, including 38 African countries, which collectively received over $5 billion in support.

Pioneering role

Expanding on Saudi Arabia’s proactive and pioneering role in promoting sustainable development, the Saudi Fund for Development (SDF) has significantly contributed to the progress of the African continent. Approximately 57.06 percent of the SDF’s total development efforts worldwide have been directed towards Africa. Through concessional development loans, the SDF has supported 46 developing countries on the continent, funding a total of 413 development projects and programs across various sectors to bolster development.

Investment ventures

In addition, the Saudi Public Investment Fund (PIF) has initiated investment ventures in African nations across sectors such as energy, mining, telecommunications, and food, with a cumulative value of SAR15 billion ($4 billion). The PIF remains committed to exploring fresh investment opportunities in Africa, both through direct investments and indirect means.

Saudi Minister of Investment, Khalid Al-Falih, disclosed the Saudi sovereign fund’s keenness to expand its investments in the African continent. He emphasized that significant projects would be unveiled, poised to transform the prevailing dynamics. Al-Falih underscored the importance of mitigating barriers that hinder sustainable investments in Africa, highlighting the need for measures aimed at facilitating such investments.

Sustainable investments

In addition, Al-Falih emphasized the objective of pursuing long-term, sustainable investments in the African market while highlighting the necessity of minimizing risks. He acknowledged the challenges faced by investors in Africa, particularly in accessing finance, which often poses cost-related difficulties for the most vulnerable countries.

Sultan bin Abdulrahman Al-Marshad, the CEO of SFD, has recently entered into 14 new development loan agreements with ministers from 12 African countries. These agreements, totaling over SAR 2 billion ($533 million), aim to provide financing for development projects in various sectors such as health, water, education, transportation, and energy. The countries benefiting from these agreements include Burkina Faso, Benin, Burundi, Cape Verde, Guinea, Malawi, Mozambique, Niger, Rwanda, Sierra Leone, Tanzania, and Angola.

Enduring partnership

Saudi Finance Minister Mohammed Al-Jadaan highlighted the significant role played by SFD in Africa through its enduring partnership. He stressed that the fund has been instrumental in financing essential infrastructure projects including roads, dams, hospitals, and schools, while also providing support for more than 400 projects throughout the continent.

“We have taken a significant stride in addressing Africa’s debt challenges by initiating the Debt Service Suspension Initiative and the G20 Common Framework for Debt Treatments during our tenure as the chair of the Group in 2020,” Al-Jadaan noted.

As one of the early proponents, Saudi Arabia has been at the forefront of advocating for the African Union’s permanent membership in the G20. Additionally, the nation is actively backing the establishment of an additional seat for Africa on the Executive Board of the International Monetary Fund (IMF). 

Understanding economic challenges

For his part, Saudi Minister of Energy Prince Abdulaziz bin Salman bin Abdulaziz reaffirmed the longstanding and close relationship between Saudi Arabia and Africa, built upon shared social fabric and a common culture. He emphasized the importance of understanding the economic challenges that Africa has faced over many years, and Saudi Arabia’s commitment to being actively engaged in addressing energy access issues. Saudi Arabia aims to serve as a role model in finding solutions to these challenges, and Africa will not be left to confront this problem alone.

He expressed that Africa requires sustained economic growth and the empowerment of its people to overcome the energy access challenge. By achieving this, not only will the global economy thrive, but there will also be broad-ranging positive effects.

Securing Africa’s income sources is crucial for the uninterrupted progress of development plans and programs. Africa faces the challenging task of striking a balance between providing energy access to its people and generating sufficient income from energy revenues to finance developmental initiatives.

Energy issue

Prince Abdulaziz highlighted the issue of energy access in Africa, underscoring that approximately 2.3 billion people lack access to clean cooking facilities, and 800 million people experience energy poverty. He emphasized the need for proactive measures, questioning why action is not being taken to address the situation. By enabling this vast population to participate in an economic boom, Africa can become a driving force for the global economy.

Furthermore, the Minister touched on several initiatives undertaken by the Kingdom in addressing this issue, including Saudi’s initiative of Clean Fuel Solutions for Cooking. This initiative is a significant component of the Middle East Green Initiative, spearheaded by Crown Prince Mohammed bin Salman bin Abdulaziz. It enjoys the utmost attention and support from the wise leadership.

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