The UAE accounted for 88% of investment from the GCC to Sub-Sahara Africa between January 2016 and July 2021, or $1.2 billion, according to a newly released whitepaper issued by The Economist Intelligence Unit (EIU) and commissioned by Dubai Chamber, in the lead up to the 6th Global Business Forum Africa in Dubai.
Key findings from the report will be highlighted during the high-level forum, which takes place October 13-14 at Expo 2020 Dubai and organized by Dubai Chamber and EXPO 2020 Dubai. Based on a survey of 200 business leaders in sub-Saharan Africa, representing a wide range of economic sectors, the whitepaper examined several trends reshaping the business landscape in Africa during the pandemic, African markets’ responses to new challenges, and the post-pandemic business outlook, highlighting prospects for boosting trade and investment flows between the GCC and Africa in the near future.
Growth sectors and recommendations
Fintech, healthcare, agriculture, and e-commerce were identified in the report as high-potential sectors where business leaders see revenues expanding in 2022. Around 90% of surveyed executives said they expect fintech to see the most growth in 2022, followed by healthcare (89%) and agriculture and food (87%).
The report highlighted Africa’s need to provide the basics, including legislation, regulations, and infrastructure to promote growth in key sectors. Secondly, the report highlights the digital economy as a leading engine of the continent’s growth, before underlining the role that GCC countries can play to support Africa to bridge the gaps in its infrastructure. The report elaborates on the role that African companies can play in supporting Gulf economies and expanding in the region.
Among the recommendations outlined in the report are: building a new business structure that ensures the economic basics for African markets, adopting legislation to regulate economic sectors and direct the economy towards achieving sustainable strategic goals, and providing the necessary infrastructure for business growth and prosperity.
Key obstacles limiting bilateral business exchange include burdensome regulations and bureaucracy were considered the top impediment to growth, cited by 59% of executives surveyed, as well as a lack in public amenities, inadequate roads that are unable to connect suppliers and manufacturers with retail centres, and a weak digital infrastructure.
UAE-Africa synergies and cooperation
The digital economy sector has been attracting growing and unprecedented investments, especially in financial technology. Indeed, funding for fintech firms in Africa increased to more than $330 million in the first half of 2021, up from $107 million in 2019.
The report revealed that 35% of executives in Africa will use online platforms in their transactions, creating an ideal opportunity for entrepreneurs in Africa to benefit from the UAE’s experience in that regard. The Emirates has achieved impressive results in the digital payments sector, driven by government directives to build an integrated digital economy.
The UAE offers the right level of expertise, investment and resources needed to fill market gaps in Africa and support the continent’s sustainable growth and development. on the UAE companies’ contributions towards developing infrastructure across African markets is perhaps best exemplified by DP World’s projects. Furthermore, the UAE’s Etisalat and Saudi Telecom Company (STC) have both been working to strengthen telecommunications infrastructure in Africa for years.
Expanding trade ties
Trade ties between the two regions reveal untapped potential, with each region relying on the other mainly for its staple products. Oil and petrochemicals are the top GCC exports to Africa, accounting for 24% and 16%, respectively, in the 2016-2020 period. Meanwhile, gold and diamonds dominate the GCC’s imports from Africa, making up 62% of the total in the same period, followed by copper, accounting for 8%.
Commenting on whitepaper, H.E. Hamad Buamim, President & CEO of Dubai Chamber, said the findings shed light on vast untapped business potential in Africa, which UAE companies can capitalise on, and noted that the report supports Dubai Chamber’s efforts to identify new business opportunities and drive bilateral trade.
Dubai Chamber’s President & CEO noted that the whitepaper offered valuable insights on the evolving and expanding trade relationship between the UAE and African markets, while it identified new avenues of economic cooperation and prospects for forging mutually beneficial partnerships.
“Africa is one of our biggest trading partners and is fundamental to our economic growth. Meanwhile, Dubai has long been a favoured destination for African companies and a launchpad for businesses looking to expand out of the continent and into global markets. Providing accurate data and studies about emerging markets is part of our efforts to shed light on investment opportunities for Dubai’s business community,” he added.
The whitepaper, titled Untapped opportunity: Deepening trade and investment between sub-Saharan Africa and the GCC, can be viewed here.
