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Building on a USD 50 billion agreement, the UAE and Africa are expanding their cooperation.

Long-term trends over decades suggest that African countries are currently extremely appealing investment locations.

The African Continental Free Trade Agreement (AfCFTA) has developed as an additional potential for cross-Africa trade and for global players to capitalise on a variety of possibilities on the continent.

The 54-nation AfCFTA economic bloc went into force in January 2021, with the goal of creating a single, continent-wide market for products and services, as well as promoting the mobility of money and people, allowing for increased trade flows between African nations.

According to the World Bank, the AfCFTA, which went into force at the beginning of this year, has the potential to raise at least 30 million Africans out of poverty, increase the continent's income by USD 450 billion (a 7% rise), and increase Africa's exports by USD 560 billion by 2035.

According to the World Bank, 'full implementation of AfCFTA would help African countries increase their resiliency in the face of future economic shocks and usher in the kinds of deep reforms that are necessary to enhance long-term growth by increasing regional trade, lowering trade costs, and streamlining border procedures.'

While the continent still has a long way to go in terms of economic development, it has benefited from significant infrastructure investment from China, France, the UAE, and other nations and businesses, which has served as a springboard for new investment, business, and trade prospects.

The UAE has taken a strategic approach to Africa, recognising that the development of its people is critical to its prosperity.

According to Dr. Thani bin Ahmed Al Zeyoudi, the UAE's Minister of State for Foreign Commerce, the UAE's trade with African countries increased to USD 50 billion in 2019 and will be over USD 40 billion in the first nine months of 2020.

According to research firm Knight Frank, the UAE has invested in 71 different projects totaling USD 5.64 billion, making it the fourth largest investor in Africa.

The United Arab Emirates is not the only country looking for prospects in Africa. The continent is a crucial component of China's multibillion-dollar Belt and Road Initiative, which aims to connect Africa, Asia, the Middle East, and Europe through a succession of infrastructural, logistics, and transportation projects.

The African Development Bank estimates that the continent needs USD 230-310 billion in investments to develop its power infrastructure, with an additional USD 190-215 billion required for the period 2026-2030. This alone represents a significant potential for the UAE, as well as other regional and worldwide investors, developers, and energy firms.

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Posted on :12/14/2021