Sub-Saharan Africa is now the world's fastest-urbanizing region. Rural migrants are flooding the country's cities at a rate that exceeds that of China and even India. According to projections, Africa's population of 1.1 billion people will quadruple by 2050, with Lagos' population growing at a rate of 77 people per hour. Over two-thirds of the projected increase will be absorbed by cities.
China's interest in Africa, for example, is well-known, as are the returns on its investments. China, however, is not the only country that recognises Africa's potential. Investors from China, India, and the United Arab Emirates now fund more than a third of all FDI projects in the region, as well as more than half of all new jobs.
Between 2014 and 2018, the UAE invested more than USD 25 billion in Africa, 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 2021.
The UAE serves as a geostrategic gateway to Africa due to its location at the crossroads of the Middle East, Asia, and Africa. Emirates, the country's flag carrier, has one of the world's largest networks of African destinations. DP World, a logistics company, operates seven maritime and inland terminals across Africa, including the busiest container terminal in Senegal, as well as facilities in Egypt, Mozambique, Rwanda, and Somaliland.
Non-oil commerce between Africa and Dubai reached USD 37.2 billion in 2018, with imports from the continent increasing by 14% and exports increasing by 13% over the previous five years. However, the Dubai Chamber of Commerce and Industry claims that this is far from the pinnacle, especially now that the African Continental Free Trade Area (AfCFTA) is in effect.
The historic free-trade agreement, which went into effect last month, establishes a single set of trade and investment standards for all of Africa. According to the Dubai Chamber, the emirate's trade with African countries might increase by 10% in the next five years.
Dubai is in a strong position to benefit from the arrangement because it is Africa's favoured re-export centre. The Dubai Chamber is now discovering and enabling new trade and investment opportunities as well as new routes for economic cooperation in various African markets for its members.
Even the Pandemic hasn't slowed the UAE's expanding trade with Africa: non-oil trade between the two nations reached USD 40.7 billion in the first nine months of 2020, up from USD 36.9 billion the previous year.
The pandemic's shift in dynamics has actually provided an opportunity for Dubai enterprises to seek new African markets as they prepare for recovery. Companies in Dubai are increasingly engaging in smaller African firms, as well as larger initiatives that assist digitization efforts, as they manage the pandemic. The UAE also announced its 'Consortium for Africa' initiative in the early months of 2020, with a pledged investment of USD 500 million, to encourage digitization across the continent and empower its youth.