Faith Nyasuguta
Facing steep U.S. tariffs, Madagascar is seeking increased investment from the United Arab Emirates (UAE) to bolster its tourism and energy sectors. The U.S., Madagascar’s third-largest trading partner, imposed a 10% universal tariff in April 2025, down from an initially threatened 47%, prompting Madagascar to diversify its economic partnerships.
Trade Minister David Ralambofiringa emphasized the urgency of attracting UAE investments, stating that the country possesses the necessary resources and human capital but requires external investment to realize its development goals. During a recent visit to the UAE, Ralambofiringa led a delegation to explore opportunities in agro-processing, tourism, and energy.
In efforts to enhance connectivity and trade, Madagascar is negotiating with Emirates Airlines to establish daily direct flights between Dubai and Antananarivo. Such a route would facilitate tourism and expedite the export of high-value goods like vanilla.
The two nations have also signed an economic partnership agreement aimed at easing trade flows. Madagascar plans to open an embassy in Abu Dhabi to strengthen diplomatic and commercial ties further.
The UAE has emerged as Africa’s largest investor, committing $110 billion from 2019 to 2023, with significant investments in renewable energy, mining, agriculture, and infrastructure. This investment surge is part of the UAE’s strategy to diversify its economy beyond oil and enhance its geopolitical influence.
Notably, the UAE’s Alpha MBM Investments LLC signed a deal with Uganda to build a 60,000-barrel-per-day refinery. Saudi firms like ACWA Power and Red Sea Gateway Terminal are actively investing in South Africa’s renewable energy sector. Abu Dhabi’s sovereign wealth fund, ADQ, pledged $35 billion to Egypt for developing high-value real estate along the Mediterranean coast.
While the UAE’s investments offer economic opportunities, concerns have been raised about labor rights and environmental issues associated with some projects. Nonetheless, African leaders view these investments as vital for addressing infrastructure deficits and fostering economic growth.
Madagascar’s pivot towards the UAE underscores a broader trend of African nations seeking diversified economic partnerships to mitigate the impacts of shifting global trade dynamics. By aligning with the UAE, Madagascar aims to secure the necessary investments to drive its development agenda amid external economic pressures.
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