“The UAE offers the right level of expertise, investment and resources needed to fill market gaps in Africa and support the continent’s sustainable growth and development,” said Dubai Chamber President and CEO Hamad Buamim.
Buamim’s statement followed the release of a new whitepaper compiled by The Economist Intelligence Unit (EIU) and commissioned by Dubai Chamber, which was published ahead of the 6th Global Business Forum Africa, an event organised in partnership with Expo 2020 Dubai to explore UAE-Africa economic cooperation,
According to the whitepaper, titled ‘Untapped opportunity: Deepening trade and investment between sub-Saharan Africa and the GCC’, the UAE accounted for 88% of investment from the GCC to Sub-Sahara Africa between January 2016 and July 2021, or USD1.2 billion.
“We believe that Dubai holds the key to unlocking Africa’s economic potential, as one of the world’s fastest-growing city economies that can offer valuable expertise in key sectors such as logistics, infrastructure, retail, tourism and finance, in addition to the right level of investment needed to support African countries scaling up their economies,” said Buamim.
He elaborated on the roles of Dubai Chamber’s representative offices in Ethiopia, Ghana, Mozambique and Kenya, in building bridges between the UAE and African business communities, identifying attractive investment opportunities in Africa and assisting African companies with their entry into the Dubai market. The number of African companies registered with the Dubai Chamber had increased by 15.5% since 2019 to reach 24,800.
“Judging by economic indicators, it’s safe to say that our efforts in Africa are bearing fruit. Dubai’s non-oil trade with Africa reached USD50 billion in 2020 despite the pandemic challenges, marking the highest level in the last decade,” Buamim said.
But the trade ties between the two regions reveal untapped potential, with each region relying on the other mainly for its staple products. Oil and petrochemicals were the top GCC exports to Africa, accounting for 24% and 16% respectively in the 2016-2020 period. Gold and diamonds dominated the GCC’s imports from Africa, making up 62% of the total in the same period, followed by copper, which accounted for 8%.
Focusing on East Africa, the continent’s most populous region with nearly 456 million people, the report said it was the Africa’s fastest-growing region with a cumulative annual growth rate (CAGR) of about 4.3% between 2015 and 2020. In 2020, it was also Dubai’s third-largest trading partner in Africa, with total trade value reaching USD12.2 billion — almost a quarter of Dubai’s total trade with Africa.
Ethiopia was the region’s largest economy, accounting for 22.7% of total real GDP in 2020, with Kenya coming in second with a 20.5% share and Tanzania third with 17.5%. Meanwhile, Mozambique was the top FDI destination in East Africa, with total FDI of USD45.4 billion in 2020 — nearly 26% of the region’s total FDI inward stocks. Other major destinations were Ethiopia with a 16% share and Zambia with 12%.
Buamim said the whitepaper offered valuable insights on the evolving and expanding trade relationship between the UAE and African markets, and identified new avenues of economic cooperation and prospects for forging mutually beneficial partnerships.
“Africa is one of our biggest trading partners and is fundamental to our economic growth. Meanwhile, Dubai has long been a favoured destination for African companies and a launchpad for businesses looking to expand out of the continent and into global markets. Providing accurate data and studies about emerging markets is part of our efforts to shed light on investment opportunities for Dubai’s business community,” he added.