Why Dubai is a trade hub for Africa
Dubai has become a gateway for investment to and from the continent, says Hamad Buamim
Non-oil trade between Dubai and Africa has amounted to Dh577 billion during 2012 to 2016, said Hamad Buamim, president and CEO, Dubai Chamber of Commerce and Industry. He was speaking exclusively to Khaleej Times ahead of the 2017 Global Business Forum Africa, which opens in Dubai on November 1.
Q: In light of the developments and changes taking place in African markets, what is your assessment concerning business relations between Dubai and Africa?
A: The directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, have been instrumental in promoting investments between the UAE and Africa, which has inspired Dubai's business community to turn to Africa and explore trade and investment opportunities opening up on the continent.
Dubai Chamber is supporting Dubai-based companies that are keen to do business in Africa by regularly organising trade missions to the continent and providing facilities needed to facilitate their entry into this market. Our four international offices in Africa, located in Ethiopia, Ghana, Mozambique and Kenya, play an active role in identifying opportunities on the continent that offer the most potential to businesses in Dubai.
The Chamber's strong presence on the continent, along with the expansion of direct flights, has also helped drive non-oil trade between Dubai and Africa, which amounted to Dh577 billion during the 2012-2016 period.
Dubai's strategic location has been one of the main contributors to developing the emirate's economic ties with Africa. Many more African companies are leveraging Dubai as a trade and investment hub.
In terms of African companies operating in Dubai, 52 per cent operate in the trade sector, 20.4 per cent are represented in the building and construction sector and 12.5 per cent work in the real estate, leasing and business services sector. On the other hand, only two per cent of these companies operate in the manufacturing sector, 1.3 per cent in the hotels and restaurants sector and 0.3 per cent in the agriculture sector.
Q: What does Dubai mean to the African continent? What can it do to promote trade and investment in Africa and pave the way for the world's business leaders to enter African markets?
A: Dubai will serve as a strategic hub along the 'New Silk Road', which will link resource-rich Africa with capital-rich regions such as the GCC and Asia, and provide foreign businesses with easy access to fast-growing markets in the continent. Africa is rich in energy and natural and mineral resources but lacks the capital, resources and infrastructure to exploit them. On the other hand, the UAE, GCC and leading economies like China, the US and India, have the capital required to invest in African markets and fuel economic growth.
Plans and strategies must take advantage of Dubai's location and potential to find global trade routes to link Asia, Africa and Latin America through the emirate. The emirate has historic and strong trade links with African countries and can be a strategic trade partner for other regions that are looking to develop their trade and investment ties with the continent.
Q: Contrary to what some believe, you assert that Africa is a prominent investment destination, despite challenging conditions which have affected its economic growth over the years. What is driving this confidence in the continent's potential?
A: Dubai is not alone in its optimism about Africa's economy and its growth potential for the future. There are several important factors that support this bullish outlook, including the continent's fast-growing population and urbanisation, a rising middle class and the emergence of the private sector in driving development.
Although progress and development has varied across Africa in recent years, the majority of African countries achieved income growth, a reduction in poverty and improvements in infrastructure, health and education. Such gains are expected to mitigate the impact of external shocks which are the main risk to Africa's exposed economies.
Sub-Saharan Africa is witnessing an economic recovery at the moment following a sharp slowdown over the course of the last two years, and its gross domestic product growth is forecast to rise to 2.4 per cent this year from 1.3 per cent in 2016, according to the World Bank. Economic growth has been even higher for specific countries such as Ethiopia, Kenya and Ghana, which are projected to see GDP growth rates of 8.3 per cent, 4.7 per cent and 3.5 per cent in 2017, respectively.
Q: To what extent does the Global Business Forum on Africa contribute to highlighting trade and investment opportunities in the African continent?
A: The Global Business Forum on Africa is the largest Africa-centric international event to be organised outside the continent. It sheds light on the trade and investment opportunities in the continent and provides a platform that brings together leaders, senior officials, decision-makers, investors and businessmen.
Q: What are the main topics that will be highlighted at this year's edition of the Global Business Forum on Africa?
A: This year's Forum bears the theme 'Next Generation Africa' and focuses on the role of young entrepreneurs in stimulating economic growth, enhancing investment opportunities and building trade relationships with countries in the region and the world.
The event will involve the participation of five African heads of state, top-level government and business leaders and entrepreneurs from Africa and the UAE who are coming together to explore opportunities for increased economic cooperation between the GCC and Africa. The forum puts the spotlight on the important role that technology, entrepreneurship and an emerging private sector are playing in driving the next phase of Africa's growth. Moreover, the event will highlight and strengthen Dubai's role as a trade and investment hub for African companies.
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