As emerging African economies develop new infrastructure and stabilize, Dubai is positioning itself to become the continent's main trade partner.
As globalization accelerates into the 21st century, new trade routes are being established, and emerging markets, particularly in Africa, will attract the bulk of international investment for decades to come. Business leaders and investors in Dubai have taken note of the booming potential in African markets and are now positioning the financial capital of the UAE to facilitate new opportunities and trade ties that will carry the continent to new levels of prosperity for all.
“Dubai is not alone in its optimism about Africa's economy and its growth potential for the future," Hamad Buamim, President & CEO of the Dubai Chamber of Commerce and Industry, said in an interview with the Khaleej Times. “There are several important factors that support this bullish outlook, including the continent's fast-growing population and urbanization, a rising middle class and the emergence of the private sector in driving development."
Equipped with proven experience in developing world-class infrastructure and business-friendly regulatory environments, investors in Dubai are offering their strong model of rapid development to partners throughout Africa. Dubai's global banking and logistics sectors are seeking to make the Gulf Emirate a major trade hub for Africa, and their enthusiasm is projected to double trade between the UAE and Africa in the coming years.
Innovation in port and shipping infrastructure, as well as the entrepreneurial spirit shared by business leaders in both geographies will prove fundamental for developing key areas of growth for several African countries. Over the last decade, Africa's non-oil trade with Dubai has grown steadily, accounting for 10.5 percent of the Emirate's total foreign trade in 2018. To date, the UAE is Africa's biggest trade partner in the Gulf, and such trends have shown promising growth. Total non-oil trade between Africa and the UAE for 2016 was USD24 billion, up from USD17.5 billion in 2014 and USD5.6 billion in 2005, according to figures from the Dubai Chamber of Commerce. Much of this growth stems from investment, primarily in transportation infrastructure in regional ports, aviation and telecoms sectors, as well as in agriculture, banking and financial technologies, or fintech.
Such results are the result of decades of investment that have cemented Dubai's relationship with key African trading partners that have giving rise to comparisons to the “new Silk Road" as regional trade ties continue to strengthen. Executives with the Dubai-based global port operator, DP World, said they are bullish on the growth outlook and trade prospects with African partners as the emerging markets on the continent stabilize and implement business-friendly regulations. Currently operating container terminals in Bebera, Somaliland, Maputa, Mozambique and Dakar, Senegal, DP World seeks to expand to more strategic transit areas throughout the sub-Saharan region. South Africa will play a key role in the expansion plan as 60% of the African economic activity takes place in the continents southern quarter. East African nations are also drawing attention, as rapid development in the region has created new investment potential.
In 2018, the UAE announced a USD10-billion investment in the South African economy, solidifying the Emirate's place as the nation's largest Middle Eastern trading partner for non-oil commodities, amounting to USD3 billion in trade annually. Interior nations such as Rwanda have also benefited from the recent African boom, where DP World began construction for a modern inland cargo handling facility in October 2019. The new USD35-million Rwandan facility will occupy 13ha of land and facilitate 50,000 containers and 650,000 tons of warehousing capacity.
UAE-African collaboration also extends to the thriving start-up scene in the sub-Saharan region. In June 2019, 10 start ups from the UAE and Africa were selected to participate in the Global Business Forum Mentorship Programme, which aims to foster cross-border cooperation between tech communities in both regions by pairing entrepreneurs with mentors to help expand their global reach and presence. Meanwhile, the Dubai International Financial Centre (DFIC) is also offering USD100 million in funding to accelerate growth and development of fintech start-ups in Africa.
With the continued support and investment from the Dubai business community, such developments are bound to set the foundation for a future of unrivaled cooperation between the two thriving geographies of Africa and the UAE.