Businesses are increasingly investing in the region's expansion as UAE-Africa commerce reaches new heights.
So far, China has been the site of the most spectacular urban transformations the world has ever witnessed. But now that the crown is on the verge of falling, the world's gaze has changed.
Sub-Saharan Africa is now the world's fastest urbanising area. Rural migrants are flooding into its cities at a rate that exceeds that of China and even India. According to projections, Africa's 1.1 billion-person population will quadruple by 2050 – the population of Lagos alone is growing at a rate of 77 people every hour. And more than two-thirds of this projected growth will be absorbed by cities.
Of course, this quick change is laced with obstacles. Urban planners and policymakers will need to stay up. However, it also provides unparalleled opportunity. China, India, and UAE investors currently fund more than one-third of all foreign direct investment (FDI) projects in the area, as well as more than half of all job creation.
In reality, the UAE invested more than USD 25 billion in Africa between 2014 and 2018, making it the continent's fourth largest investor. Non-oil commerce between the UAE and Africa has increased from USD 33 billion in 2015 to USD 50 billion in 2019.
Because of its location at the crossroads of the Middle East, Asia, and Africa, the UAE also acts as a geostrategic gateway to Africa. Emirates, the country's flagship airline, has one of the world's largest networks of African destinations. And logistics company DP World has seven maritime and inland ports in Africa, including the busiest container facility in Senegal, as well as facilities in Egypt, Mozambique, Rwanda, and Somaliland.
Dubai is in a strong position to gain from the deal because it is Africa's favoured re-export centre. The Dubai Chamber is currently finding and enabling new trade and investment possibilities as well as new routes for economic collaboration in various African markets for its members.
Even the epidemic hasn't slowed the UAE's growing commerce with Africa: non-oil trade between the two countries reached USD 40.7 billion in the first nine months of 2020, up from USD 36.9 billion in the same time last year.
Companies in Dubai are increasingly engaging in tiny African firms, as well as larger initiatives that assist digitization efforts, as they manage the epidemic. The UAE also announced its ‘Consortium for Africa' project in the early months of 2020, with a pledged investment of USD 500 million, to drive digitalization throughout the continent and empower its young.
Simply put, the new free-trade deal and the recovery from the epidemic will most certainly further open up African countries to commerce and investment.