Gulf capital is reshaping the monetary order of the Center East and North Africa — more and more displacing the IMF by means of a mixture of bilateral funding, state-backed funding and political affect. By Jason Mitchell.
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IMF/World Financial institution Particular Report 2025
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Jason Mitchell
Saudi Arabia and the UAE are providing massive bilateral packages inside the Center East and North African sphere that in some circumstances now match or exceed the size of IMF programmes. These funds should not tied to coverage reforms or phased evaluations. As a substitute, they provide fast entry to liquidity with out the political value of reducing subsidies, elevating taxes or adjusting alternate charges.
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For a lot of governments, that makes them extra enticing than IMF loans. However for traders and collectors, it raises issues about transparency, debt sustainability and the flexibility to evaluate sovereign danger.
Solely three international locations within the area — Morocco, Jordan and Egypt — at the moment have totally energetic IMF programmes, though Gulf capital has additionally performed a distinguished position in every. In Egypt, for instance, Gulf funding has supported liquidity and bond market stability whereas overlapping with IMF assist.
Morocco has maintained entry to IMF credit score since 2023 with out drawing on the funds, whereas Jordan is implementing a four-year programme agreed in early 2024 and has secured further IMF assist for long-term resilience. In contrast, Tunisia has blocked IMF engagement completely and Lebanon stays stalled in negotiations.
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As a substitute of IMF loans, many governments are turning to Gulf bilateral funding — together with central financial institution deposits, direct price range assist and largescale investments from Saudi and Emirati establishments. These preparations bypass the IMF framework completely: there aren’t any phased disbursements, no efficiency evaluations and little public disclosure.
“The GCC, particularly the UAE, Saudi Arabia, Kuwait and Qatar, have dominated the financial landscape in the MENA region,” mentioned Carla Slim, senior economist for MENA at Normal Chartered. “In recent instances, such as Egypt’s IMF programme, GCC financial support to ensure a fully funded programme was a rigid IMF conditionality to move forward with the programme.
“As such, we might not argue the GCC is bypassing the IMF however performing as a complement to IMF funding and infrequently requiring fiscal reforms resembling these of the IMF, such because the Bahrain 2018 fiscal steadiness programme. Reform incentives stay aligned with IMF blueprints, because the GCC is as eager on fiscal sustainability.”
This shift is gradually happening, with Gulf states increasingly positioning themselves as alternative lenders of last resort.
James Swanston, MENA economist at Capital Economics, said: “I feel it is definitely been a pattern over the previous three years or so the place the Gulf has stepped into this realm, significantly led by Saudi Arabia, the UAE and, to some extent, Qatar. Economically, I feel a part of the reason being that these three economies have an enormous quantity of capital that they might use. Realistically, they have been methods of recycling that, and a part of that was in these kinds of ventures into the remainder of the area.”
Alia Moubayed, managing director for fixed income strategy at Jefferies, the investment bank, offers a similar perspective. “The contribution of Gulf states, notably Saudi Arabia and the UAE, has reshaped the monetary panorama considerably, as their funding to this point has outweighed by far the quantity of bilateral and multilateral funding offered underneath conventional IMF programmes.
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“Having said that, while some UAE capital has bypassed the traditional IMF conditionality model, it has also reshaped the IMF’s framework and often provided incentives for other bilateral donors to increase their envelope in support of the country.”
Egypt’s expertise reveals how Gulf assist is reshaping the position of the IMF in observe. The nation is underneath an energetic US$8bn IMF association launched in March 2024, however reform implementation has lagged. Whereas the fourth overview launched US$1.2bn in March 2025, additional disbursements are actually delayed because the IMF strikes to mix the fifth and sixth evaluations to present Egypt extra time to fulfill structural reform targets.
In contrast, the UAE’s US$35bn Ras El-Hekma funding bundle — introduced in early 2024 and led by Abu Dhabi’s sovereign wealth fund ADQ — included US$24bn in recent international alternate and the conversion of US$11bn in current central financial institution deposits into fairness stakes.
The deal triggered a rally in Egyptian sovereign bonds and helped unlock the IMF programme enlargement, though further funding has but to materialise. In August 2025, Egypt additionally introduced plans to activate a US$7.5bn partnership with Qatar, reinforcing the position of Gulf states as first responders in sovereign liquidity crises. Saudi Arabia, in the meantime, prolonged US$5bn in deposits to Egypt’s central financial institution in 2022 and has continued to ramp up funding pledges throughout the area.
Nonetheless, whereas these flows have offered quick liquidity and market reduction, they’ve additionally decreased strain for reform.
Diversified engagement
Past Egypt, engagement with the IMF has assorted extensively. Tunisia has averted IMF assist completely, with President Kais Saied repeatedly rejecting IMF phrases — from subsidy cuts to tax hikes and public sector reforms — arguing austerity would gasoline unrest in a rustic already scuffling with excessive unemployment and rising dwelling prices. Since consolidating energy in 2021, he has framed IMF conditionality as international interference and blamed Tunisia’s financial woes on previous corruption reasonably than present coverage decisions.
“Tunisia has rejected an IMF deal. President Saied is very staunchly anti-IMF,” mentioned Swanson. “I think Tunisia will probably, for the time being, always favour Gulf support because of how Saied views the IMF. But, at the same time, it’s quite notable that it even seems now that the Gulf states are sort of oblivious to the fact that Tunisia needs to go through economic reform as well.”
Saudi Arabia offered a US$500m bundle in July 2023 — a US$400m delicate mortgage and a US$100m grant — to assist Tunisia’s price range and reserves. Past this, no vital Gulf funding has materialised.
In the meantime, Lebanon stays largely sidelined amid deep financial and political paralysis, with no significant Gulf funding or IMF engagement. Regardless of some legislative reforms — together with amendments to banking secrecy and a restructuring framework — the dearth of political consensus continues to hinder monetary assist.
The IMF acknowledged restricted progress in a June 2025 evaluation however confused that vital reforms are nonetheless required and that exterior financing stays important. In the meantime, Gulf engagement has been largely symbolic. No new bilateral loans have materialised, and though Gulf states have signalled a willingness to help Lebanon’s restoration, this assist stays conditional on credible reform commitments.
Nonetheless, Morocco stays one of many few MENA international locations with energetic IMF assist. In April 2023, it secured a US$5bn versatile credit score line, which stays undrawn and serves as a precautionary buffer. The ability displays Morocco’s comparatively robust macroeconomic framework and credibility with exterior collectors. In contrast to neighbours which have rejected IMF phrases or turned to Gulf financing, Morocco has maintained multilateral entry with out politically delicate conditionality.
The IMF’s 2024 Article IV overview praised Morocco’s fiscal self-discipline and institutional resilience, whereas noting that rebuilding buffers after successive shocks — together with the 2023 earthquake — stays a key precedence. Morocco has not sought direct monetary assist from Gulf states lately, setting it other than the area’s broader shift in direction of bilateral Gulf funding.
Jordan additionally stays totally engaged with the IMF. A four-year prolonged fund facility authorized in January 2024, value round US$1.3bn, has delivered US$595m after three evaluations. In June 2025, the IMF additionally authorized a 30-month resilience and sustainability facility granting US$700m to assist reforms in water, power and local weather resilience, reinforcing Jordan’s fiscal stability and long-term reform agenda.
Gulf capital is reentering Syria, as soon as remoted by conflict and sanctions. In July 2025, Saudi Arabia signed round US$6.4bn in funding agreements with the nation throughout telecoms, actual property, cement, schooling and agriculture. Across the similar time, Qatari and UAE corporations signed offers value an estimated US$14bn, together with plans for a brand new airport and a subway system in Damascus. Saudi Arabia and Qatar additionally settled Syria’s arrears to the World Financial institution, paving the best way for renewed multilateral engagement and eligibility for brand new funding.
Whereas Syria lacks a proper IMF programme, the fund reengaged in 2025 by appointing its first mission chief to the nation since 2009.
“This emerging Gulf-led model is already shaping the political economy of reform across the region and redrawing geoeconomic power balances within the region, with Gulf capital also strengthening geopolitical alignment across the MENA region,” Moubayed mentioned. “Gulf-led financial diplomacy has significantly anchored sovereign credit risk in Egypt, Bahrain, Jordan and, to a lesser extent, Pakistan, as markets increasingly account for the Gulf capital credit enhancement impact.”
Furthermore, Gulf monetary assist throughout MENA is much from uniform. As a substitute of a blanket method, Saudi Arabia and the UAE tailor their interventions based mostly on political alignment, regime stability and the credibility of reform plans. States with clear governments and outlined financial agendas have drawn the biggest packages, whereas these mired in political paralysis or rejecting reform phrases have seen far much less engagement.
“In Egypt, it’s very clear — they’re backing the regime,” Swanson mentioned. “That’s not the case in Tunisia or Lebanon. It’s a lot more cautious there, partly because there isn’t the same political alignment, and partly because there’s no real economic reform agenda for them to support. The Gulf is looking for stability and influence, but they’re not going to throw money at governments that can’t deliver either.”
Furthermore, the monetary attain of Gulf states now extends nicely past the MENA area, with the UAE and Saudi Arabia rising as energetic gamers in sub-Saharan Africa’s financial and geopolitical panorama. Their engagement spans concessional lending, sovereign deposits, infrastructure funding and strategic bilateral partnerships.
In East Africa, the UAE agreed to a US$1.5bn sovereign mortgage to Kenya in 2024, serving to Nairobi cut back its reliance on IMF-linked programmes. Saudi Arabia’s improvement fund has signed delicate mortgage agreements with greater than a dozen African international locations — together with Malawi, Rwanda, Niger and Mozambique — totalling over US$500m by the tip of the 2023 Saudi–Africa Summit.
Gulf capital can also be being deployed by means of logistics and infrastructure corridors. DP World is constructing a US$1.2bn deepwater port in Senegal, managing port operations in Tanzania and increasing inland freight hyperlinks from Berbera in Somaliland to Ethiopia. AD Ports has dedicated US$250m to Luanda Port in Angola and is rising its presence throughout southern Africa. Masdar, ACWA Energy and AMEA Energy are backing clear power tasks in Togo, Senegal, Ethiopia and South Africa.
Ties between the UAE and Ethiopia have grown particularly shut. The UAE’s final confirmed deposit was a US$1bn switch in 2018, alongside US$2bn in mission investments. In July 2024, a foreign money swap settlement value as much as Dh3bn (US$820m) offered additional financial assist. A proposed US$3bn railway from Ethiopia to Berbera stays on the memorandum of understanding stage, with no binding financing or development commitments disclosed.
This increasing footprint goes past improvement finance. In Rwanda, Qatar Airways has taken a 60% stake in Bugesera Worldwide Airport and is in talks to accumulate 49% of RwandAir, deepening its position in African aviation.
Lengthy-term view
Gulf traders are prepared to take a far longer-term method than lots of their Western counterparts, seeing alternatives that others usually overlook.
“I think they could take a 10 or 20-year view, which is much easier when you’re the sheikh or crown prince and you have that expectation on how long you’re going to serve for,” mentioned Charlie Robertson, head of macro technique at FIM Companions. “You put investment in now. African assets are so cheap.”
Nonetheless, the Gulf’s rising presence shouldn’t be with out controversy. A number of investigations, together with a January 2024 UN consultants’ report and Reuters flight analyses, have cited an airbridge by means of Chad supplying arms to Sudan’s Speedy Assist Forces throughout that nation’s ongoing civil conflict. Abu Dhabi has repeatedly denied arming the RSF, insisting its operations in Chad and Sudan are humanitarian in nature.
“In countries like Egypt or Ethiopia, the Gulf is stepping in where the IMF either isn’t acting or is taking too long,” mentioned Moubayed. “But it’s not a free lunch — there are still expectations, just not the ones we’re used to. And it’s harder to track what’s actually being agreed. There’s much less transparency, no published programme reviews or structural benchmarks. That makes it harder for markets to price risk — and for citizens to know what their governments are signing up to.”
Moreover, MENA governments now have a broader vary of funding choices past the IMF, together with Eurobond and sukuk issuance, syndicated loans, Gulf bilateral deposits and personal credit score funds — all of which provide sooner execution and fewer circumstances than conventional IMF lending.
Bond and sukuk markets have grown quickly. Whole GCC issuance reached US$147.9bn in 2024, up 55% from US$95.3bn in 2023, based on Marmore MENA Intelligence. Saudi Arabia accounted for 53.7% of the entire, with the UAE contributing 26.0%.
This momentum has continued into 2025. Within the first half of the yr, US$92bn was raised throughout 215 bond and sukuk points, based on the Markaz Mounted Revenue Report cited by Commerce Arabia and Marmore. Company issuance led the expansion, rising 67% yr on yr to US$60.2bn, reflecting deepening personal sector engagement in regional capital markets.
Nonetheless, each traders and multilateral establishments have turn into more and more involved concerning the lack of transparency in Gulf bilateral agreements. In contrast to IMF programmes, which publish mortgage circumstances, disbursement schedules and efficiency benchmarks, Gulf offers are sometimes negotiated behind closed doorways with little public disclosure.
“Without an IMF anchor, it’s hard for the market to know what’s going on — and even harder to price it,” mentioned Robertson. “One reason IMF programmes exist is to give external investors a degree of comfort that a country is being steered back towards solvency. If that’s missing, it’s much harder to justify new inflows.”
Furthermore, Saudi Arabia and the UAE proceed to increase their monetary footprint throughout the broader MENA area, not simply by means of sovereign assist but additionally by way of state-linked funding and improvement establishments. The Saudi Fund for Growth disbursed almost US$1bn in concessional loans throughout 13 international locations in 2024 alone, with a deal with infrastructure, power and schooling — bringing its cumulative funding to over US$20bn since 1975.
On the similar time, sovereign wealth funds are main a rising wave of direct fairness and infrastructure funding. The UAE’s ADQ, Mubadala and the Funding Company of Dubai have deployed capital into Egypt, Morocco and Jordan — backing tasks in infrastructure, logistics, agribusiness, telecoms and actual property.
In Morocco alone, Emirati commitments are estimated at above US$20bn. Saudi Arabia’s Public Funding Fund, one of many world’s largest sovereign traders, can also be increasing its regional footprint. Whereas general Saudi FDI outflows dipped in 2024, PIF continues to again logistics, industrial and power platforms throughout MENA, together with port infrastructure and clear power partnerships in North Africa.
An enormous digital infrastructure buildout reinforces this funding push. Saudi Arabia goals to increase its knowledge centre capability from round 300MW at this time to 1,300MW by 2030. The UAE’s IT load is projected to rise from 496MW in 2025 to almost 918MW by the tip of the last decade. These services will anchor regional cloud and AI networks — and underpin the Gulf’s emergence as a digital and monetary hub for MENA. Reasonably than offering loans or support, Saudi and Emirati capital is reshaping the area by means of possession, infrastructure and long-term financial integration.
Gulf capital can also be funding a brand new wave of airports, logistics corridors and power infrastructure throughout North Africa — from main port upgrades in Egypt and Morocco to aviation hubs linking the area on to Dubai and Riyadh. These tasks are embedding Gulf states on the centre of MENA commerce, knowledge and transport networks, locking in long-term financial and political affect that extends nicely past direct monetary assist. Gulf financing is steadily eroding the IMF’s position because the area’s main supplier of exterior funding and coverage affect.
