A bridge over turbulent waters: the economic relations between Israel and the countries of sub-Saharan Africa in the information age (2000-2024)

Key Findings 

• Israel has diplomatic ties with 46 African countries, focusing on high-level visits and agreements. Engagement is modest, relying on a minor diplomatic presence, NGOs, and its alliance with the U.S.

• Africa’s share of Israel’s exports has been constantly low, as exports of goods to the continent account for 1.5% of its total exports. In addition, export of services makes up less than 50% of total exports to the continent, in contrast to the pattern seen in Israeli exports to the rest of the world and Africa’s transitions to digital and service-based economic activities.

• There is limited direct investment between Israel and Africa, despite Africa’s growing FDI.

• Israel hasn’t strategically engaged with the African Continental Free Trade Area (AfCFTA) or African trade blocs that could leverage its strengths in technology, agriculture, water, and energy.

• Israel plays a minor role in Africa's sustainable development arena, thus missing significant opportunities.

• African institutional investors are growing, with assets under management increasing by 48% between 2017 and 2020. Israel could attract these funds, benefiting both diplomatically and economically.

• Israel's competitors, such as Turkey, the UAE, Finland and Iran apply strategic approaches and long-term thinking to advance their geopolitical and economic interest in SSA. Israel does not currently do so, hence the country and its private sector are at an inherent and constantly widening disadvantage.

Main Conclusions and Policy Recommendations  

• Plan strategically and for the long term; there are no quick wins in international relations.

• Appoint a high-level permanent special envoy for Africa.

• Establish a Development Finance Institution (DFI): A modest DFI could signal Israel’s investment priorities and align with other DFIs.

• Boost service exports: Focus on digital transformation to align with Israel’s high-tech sector and Africa’s needs. Boosting bilateral Tourism also presents a compelling opportunity.

• Aim for a Free Trade Agreement with AfCFTA: Engage with AfCFTA, cultivate relationships with Africa’s Free Trade Agreement secretariat.

• Increase direct investment: Create government-backed financing mechanisms targeting African institutional investors

• Reform ASHRA (Israel's ECA): Simplify procedures, increase risk appetite, and incorporate SDG/ESG considerations.

• Promote Technological Innovation: Focus on fintech, agri-tech, and health-tech sectors in SSA.

• Support exporters and investors with accurate information and deal support.

• Engage significantly with other DFIs and development organizations.

• Incentivize high-tech startups in specific sectors to scale up in Africa.

• Encourage bilateral investments and support PPPs.

• Foster financial investments by African pension funds

Download the full policy paper below.

About the Authors:

Zafir Asaf has been engaged in creating a positive social and environmental impact for over a decade. He focuses on cultivating complex projects and technological innovation in emerging markets, including in the Middle East. Previously, Zafrir led the Israeli government's work with international development banks and served as commercial attaché in Vietnam and. He is the chairman of the Israeli association for international development SID- Israel, and a board member of the Israeli Forum for Impact Economy.  

Yuval Derry is an experienced business and strategy analyst, focusing on business planning and financial structuring for Gulf-Israeli joint ventures. Previously, he served as Israel's consul to the southwest USA, in the five-state region of Texas, Arkansas, Oklahoma, New Mexico, and Kansas.   

Watch the paper's highlights:

Zafrir presented these findings on July 2, 2024, at Tel Aviv University during the “Africa and Israel: Building Strategic and Economic Bridges” conference. The event was co-organized by the Israel-Africa Relations Institute, the S. Daniel Abraham Center for International & Regional Studies at Tel Aviv University, and the Jerusalem Institute for Strategy and Security (JISS). You’re welcome to watch the presentation below.