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Gulf trade with Africa a growing source of optimism


Trade and investment between Arabian Gulf countries and Africa could historically be summed up in one line: oil going one way, a few agricultural products going the other. This is now changing as an increased diversity of capital is on the move in both directions. UN figures show that total merchandise trade between Africa and UAE alone increased from US$5.6 billion in 2005 to $17.5bn in 2014, the latest year available. The evolution of financial interaction begins with a migration by Gulf economies away from mostly doing business with North Africa. Now, the relationship extends from Cape Town to Cairo. The fact that the South African president Jacob Zuma was on Tuesday facing a secret vote of no confidence may affect relations with South Africa in the short term - should he lose - but that would be unlikely significantly impact overall trade with the continent "There is a definite increase in interest in Africa as a whole by Gulf economies," says Ebrahim Deen, a researcher at the Johannesburg based Afro-Middle East Center. "Foreign direct investment [FDI] to Europe and elsewhere has slowed somewhat and Gulf countries are looking elsewhere to place offshore capital." Africa-focused investment is also taking advantage of another Middle East trend. Over the past few decades many Gulf industries were set up not only to service locals, but also to expand economies away from purely resource exports. Now, as these industries mature they need fresh pastures to grow. In particular infrastructure-related companies have found fertile ground across the 54 countries that make up the African continent. A few of the most visible Gulf investors include the Saudi Telecom Company, which holds a 75 per cent stake in Cell C, a mobile operator in South Africa. The Investment Corporation of Dubai has placed $300 million in Dangote Cement of Nigeria, one of Africa's fastest expanding companies; Etihad has bought a 40 per cent stake in Air Seychelles; and Rani Investment, based in Dubai, is a key investor in Mozambique’s tourism industry where it operates luxury hotels. Tourism is especially alluring to practiced Gulf operators and an emerging African hospitality scene.


Source : https://www.thenational.ae
Posted on :8/14/2017