The first G20 summit on African soil delivered significant dividends for the continent, with the UAE pledging $1bn (R16.4bn) for “AI for development” to complement its growing investment footprint. Economic relations between South Africa and the UAE are already reaching new heights, strengthening South Africa’s diversification efforts.
With South Africa facing continued strained relations with the US and an impending EU carbon tax, it would be prudent for the country to seek trade partners in Asia. While China has been expanding its influence, already accounting for 12% of trade, the Middle East holds immense potential for growth.
UAE government data shows South Africa is the UAE’s second-largest trading partner in Africa, accounting for nearly 8% of the UAE’s non-oil trade. Within the Gulf Co-operation Council, the UAE is one of South Africa’s key import partners, holding a 38% share of the region’s trade.
Dubai has been a growing tourist destination for many South Africans and also offers many job opportunities. Trade between South Africa and the UAE grew 45% between 2020 and 2023, with renewable energy, agriculture and fintech driving mutually beneficial growth. In 2023, South Africa imported goods worth $4bn from the UAE, while exports to the UAE totalled $2.53bn.
The UAE has recently increasingly positioned itself beyond just being a tourist destination — a trade shift South Africa can learn from as it develops its economy
These figures reflect a broader trend of deepening trade relations and South Africa’s new venture to the East. The UAE has recently increasingly positioned itself beyond just being a tourist destination — a trade shift South Africa can learn from as it develops its economy.
While growth started in the oil sector, the UAE has advanced beyond a commodity-dependent economy, which is a pathway South Africa is seeking as it makes efforts to beneficiate minerals at the point of extraction.
As the US imposes 30% tariffs on South Africa and relations with Washington become increasingly strained, access to an open and expanding UAE market is expected to support job creation and infrastructure development.
Investment flows are also accelerating. UAE investments in South Africa exceeded $1.3bn in 2024, while South African foreign direct investment into the UAE surpassed $600m over the same period. This points to deeper business integration between the two countries.
The momentum has spurred new initiatives to promote collaboration. The South Africa Business Group in the UAE was established to link companies and boost trade. Concurrently the Dubai Chamber opened an office in South Africa, and memorandums of understanding were signed between the UAE Federation of Chambers of Commerce and key South African business councils.
These developments have been overshadowed by tensions with the US and China’s trade shift towards Africa. However, its relationship with the UAE provides a blueprint for South Africa as it seeks to diversify its economy.
Key sectors driving bilateral interest include agriculture, fintech, AI, manufacturing, renewable energy, the digital economy, health care and education
The UAE’s infrastructure, tax-free environment, strategic location and financial system continue to attract South African firms seeking regional expansion. At the same time, several UAE companies — including Adnoc, DP World, Amea Power, Infinity Energy and AWS Distribution — have launched major operations in South Africa. The relationship is increasingly reciprocal and complementary.
Key sectors driving bilateral interest include agriculture, fintech, AI, manufacturing, renewable energy, the digital economy, health care and education. These are attracting investment and creating opportunities on both sides, supporting South Africa’s goal of 3% economic growth.
Recent years have seen several landmark agreements. These include:
- Amea Power’s 2023 power purchase deal for an 85MW solar photovoltaic plant;
- the opening of the Dubai Chamber’s Johannesburg office; and
- Infinity Power’s acquisition of Lekela Power, Africa’s largest renewable energy transaction to date.
These developments support South Africa’s ambition to diversify its energy mix and increase solar power to 15% of the grid.
Further milestones include:
- Adnoc’s acquisition of OMV’s South African petrochemical assets in 2023;
- DP World’s expansion into South African logistics; and
- Amea Power’s 20-year agreement for the 120MW Dornhoek solar project, valued at $120m.
Together, these developments signal a new phase in UAE–South Africa economic relations at a critical moment in South Africa’s development. It is crucial for South Africa to deepen these types of trade relations for sustainable growth and long-term prosperity.
• Mabasa is an author, journalist and researcher
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