UAE offers investors window of opportunity into Africa
Investors looking for opportunities to invest in Africa should turn their sights to the UAE, which has positioned itself as an important gateway to various economies in the continent, experts said at a recent webinar organised by the Dubai Chamber of Commerce & Industry.
Held in partnership with Absa Group and DIFC, the 'African Continental Free Trade Area and Business Opportunities with UAE' webinar brought together various experts, who spoke about Dubai's ongoing efforts in building new bridges of economic cooperation to African markets. The discussion also highlighted the role of the African Continental Free Trade Area (AfCFTA) in bringing together all 55 member states of the African Union, covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than $3.4 trillion.
Omar Khan, director of International Offices at the Dubai Chamber, explained that The UAE is one of Africa's top sources of foreign investment, and that the country is supporting the continent's economic development by funding infrastructure projects as well as filling market gaps in various fast-growing sectors of Africa's economy.
Khan noted that Africa will continue to enjoy an increased focus from investors in the years to come. "Dubai has been playing a great role as a facilitator for people that are looking to test the waters in Africa. There is a closing window of opportunity that investors have to capture. Look at South Africa as an example of what many other countries in Africa will look like as they develop," he said.
Emane Muhamad, economic researcher at the Dubai Chamber, revealed that foreign direct investment (FDI) inflows to Africa are dominated by China, Europe and the US. The UAE is the fourth largest global investor in Africa, while Dubai accounted for over 85 per cent of the UAE's total non-oil trade with Africa. Currently, West Africa is leading the recovery from the global Covid-19 pandemic, while Central Africa also registered a sharp rebound in June 2020.
Looking ahead, Muhamad said that the strong momentum observed in West Africa and Central Africa's sub regions is likely to continue throughout the second half of 2020. Dubai-based businessmen have an opportunity to re-position themselves and explore new African markets.
Highlighting the impact of the Covid-19 pandemic, Jeff Gable, head of FICC Research and chief economist at Absa Group, said that confirmed cases have now exceeded one million across the continent, but weekly new cases are shrinking in most major economies.
"Looking at economic growth in the future, we will see growth return in 2021, but slower than before," he said. "The continent as a whole will witness a growth of four per cent this year. Tourism is going to be under a lot of pressure going forward. Despite the challenges, the fundamental attractiveness of Africa must not be forgotten. The region boasts a young, dynamic demographic; infrastructure that will continue to boost productivity; and vast untapped opportunities in the agriculture and commodities sectors."
Similarly, Bohani Hlungwane, regional head of Trade & Working Capital Africa Regional Operations at Absa Group, identified manufacturing, healthcare, pharmaceuticals, technology and infrastructure as high potential sectors for UAE FDI.
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