OUT OF AFRICA

Dubai 2016 | DIPLOMACY | FOCUS: AFRICA-UAE RELATIONS

Africa's growth over the last decade has piqued Dubai's interest, encouraging it to further strengthen economic ties with the continent.

Africa has experienced a decade of strong growth compared to the rest of the world, and its significance is expected only to increase over time due to its potential to become the central driver for the global economy. Africa and Dubai have historically been investment partners; however, the last five years have marked an increased interest from the Emirate to the African continent. The UAE is the main trading partner of Africa in the GCC, with primary products accounting for 80% of the UAE's total imports from Africa. Africa also has the potential to mitigate Dubai's food security issues, while the continent's vast natural resources and a rising middle class have led to the creation of new businesses across a variety of industries. International investors are seeing increasing opportunities in sectors such as infrastructure, agriculture, mining, logistics, trade, financial services, and tourism.

Infrastructure has been singled out as a key pillar for Africa's development. More than half of the population in Africa lives in cities, making infrastructure a key requirement to create opportunities for the increasing population. Regarding the lack of space in Africa's overcrowded cities and Dubai's expertise in city infrastructure, the Hon. Ekwow Spio-Garbrah, Minister of Industry & Trade of Ghana, told TBY, “we can learn from Dubai about growing vertically, rather than growing out horizontally.”

Public-private partnerships enable investors to enter markets in Africa with a long-term vision, carefully considering the unique structures, laws, and opportunities offered by each individual country. There still exists some stigma around investor security in Africa; on the other hand, more and more African countries are implementing guarantees to investors via such instruments as the World Bank's Multilateral Investment Guarantee Agency (MIGA). The Democratic Republic of the Congo is now a member of the Organization for the Harmonization of Business Law in Africa (OHADA), a system used by 16 African countries, whereby, “if a party is not satisfied with local justice, they can conduct proceedings outside the country, and agree to respect the outcome,” informed the Hon. Modeste Bahati Lukwebo, Minister of National Economy of DRC.

Dubai entities such as DP World, Emirates Airlines, and Dnata have demonstrated the UAE's interest in looking for opportunities and synergies. Emirates Airlines' dominant presence in the African continent has played a vital role in opening new markets for investors coming from the UAE. By 2020 Dubai is expected to reach 1.5 million visitors from Africa. Dubai is also looking into other sectors where it already has expertise. Commenting on this, HE Ameenah Gurib-Fakim, President of the Republic of Mauritius, said, “Dubai has shown strength in the logistics, transport, and hospitality sectors.”

For the third consecutive year, through the Africa Global Business Summit, an event organized by Dubai Chamber of Commerce in November 2015, notable African stakeholders debated Africa's economic outlook and key strategic areas of development. By doing so, key decision-makers from the global investment arena were encouraged to direct revenue flows into Africa. The chamber was one of the first to acknowledge the potential underlying the continent. They began to form relationships with the Common Market for Eastern and Southern Africa (COMESA) and now they are focusing on the Sub-Saharan region. Between January and October 2015, African companies accounted for 21% of the new companies that joined Dubai Chamber's membership. This is a clear indicator of Dubai's attractiveness to international businesses. Furthermore, on the sidelines of the AGBF2015, the Dubai Chamber of Commerce and Industry signed an MoU with Coface and National General Insurance Company (NGI) to support and facilitate Dubai Chamber members to export and trade into African Markets. Africa's Tripartite Free Trade Area, to be comprised of 26 states and 58% of Africa's total GDP, will further benefit the economic exchange between Africa and the UAE. Dubai is the ideal gateway to the rest of the world, especially Asian markets, so an increasing number of exports and imports are sure to transit through Dubai.