With six out of the world’s top ten fastest growing economies in close proximity to the Gulf, the UAE has become a partner for African businesses and a gateway for multinational companies looking to do business in Africa and seeking an overseas satellite office. Gulf investment attempts to branch out to south and west Africa in various fields including airlines, port operators, construction companies, and state-run investment funds and these are just some of the industries leading the charge.
Dubai Chamber of Commerce has invested millions in the last five years, as part of its expansion strategy in Africa, and in the coming years will double the spending. The efforts have given a major boost to UAE-Africa trade ties by facilitating cooperation between businesses and investors on both sides. UAE has become a node of connectivity linking Europe and the Americas to Asia and Africa, and vice-versa which is why UAE-Africa ties matter so much to the continent. The trade ties have a positive impact in connecting Africa to a wider world, while also playing a modest role in investing in the infrastructure needed for Africa’s growth.
Africa has the world’s most rapid urbanisation rate and, by 2034, is set to have a larger working-age population than both India and China. In the next eight years, consumer spending in Africa is set to rise by $1 trillion as emerging middle classes move into the cities, and their demand for consumer products and infrastructure grows.The results of an online poll by an economic think tank has indicated that 48 percent of respondents considered trade to be the most promising sector for investment, followed by financial services (24 percent), while 14 percent said logistics and tourism sectors had the most potential.
The biggest focus of the governments in both regions is infrastructure. Gulf companies and governments invested more than $30bn in infrastructure development in Africa from 2004 to 2014, according to data from Dubai Chamber of Commerce and Industry, and this number is only increasing. The UAE is playing an increasingly important role in bridging this infrastructure gap by using its proximity, along with its infrastructure and logistics services and experience, to support the trade of commodities such as oil, coffee, tea and gold.
In the last 15 years, rapid economic growth has seen Africa emerge from being a backwater to offering enormous economic opportunities. From Kenya in the east to Nigeria in the west, incremental reforms have been implemented, Dubai is one of the few places able to facilitate business and logistics for the Africa’s emerging middle class, especially for those in Kenya, Nigeria, and South Africa. And with the International Monetary Fund projecting that Africa will be the world’s second-fastest-growing region in the period to 2020, that sort of cooperation seems like a very good idea. The opportunities have never been better.