KHALEEJ TIMES, Thursday, Oct 14, 2021 | Rabi Al-Awwal 8, 1443
Dubai seeks to bolster economic ties with East Africa
East Africa, the fastest-growing economic district
in the African continent, offers tremendous opportunities for the Dubai business
community, the Dubai Chamber of Commerce said.
“Dubai has made great progress in its efforts to expand commercial, economic,
and cultural ties with African, guided by our leadership’s directives, which not
only build on our historic relationship with the continent but also bet on
Africa’s potential as one of the world’s most promising regions,” said Hamad
Buamim, president and CEO of Dubai Chamber.
“We pave the way for Dubai’s business community to enter into African markets,
offering them reliable insight into the continent with in-depth studies, most
notably, the series of region-specific reports issued under our flagship ‘Why
Africa?’ initiative,” said Buamim.
With a cumulative annual growth rate (CAGR) of about 4.3 per cent, East Africa,
the most populous region with nearly 456 million people, was also the
continent’s fastest-growing district between 2015 and 2020, revealed a new
report by the Dubai Chamber.
Focusing on East Africa, the report is the latest instalment of the Chamber’s
‘Why Africa?’ initiative, which explores and analyses key economic indicators in
the continent, going region by region.
The initiative is a precursor to a two-day Global Business Forum (GBF) Africa
2021, which started on Wednesday on the sidelines of Expo 2020 Dubai.
East Africa-Dubai bilateral trade figures reveal that the region’s share of
Dubai total trade grew considerably over the years. In 2020, it was the
emirate’s third-largest trading partner in Africa, with total trade value
hitting $12.2 billion — a 24.4 per cent share of Dubai’s trade with Africa,
Dubai Chamber said in its report.
“Dubai’s trade with
East Africa is relatively balanced. Imports accounted for 43 per cent of trade
activity, while re-exports and exports made up 42 per cent and 15 per cent in
2015-2020. Imports grew 22 per cent in the same period, while export,” said the
Jewellery and precious stones accounted for about 85 per cent of Dubai imports
from the region in 2015-2020, worth $5.6 billion in 2020 alone. Uganda and
Zimbabwe accounted for the bulk of that value, making up 28 per cent and 23 per
cent of the total respectively.
Excluding this category, Dubai’s total imports in 2020 were valued at $412.2
million, 41 per cent of which came from Kenya, with Zimbabwe, Tanzania, and
Ethiopia following with 15 per cent, 10 per cent, and 9.0 per cent.
In 2020, Dubai’s total re-exports to East Africa were valued at $3.9 billion,
with leading products being electrical machinery, mineral fuels, vehicles, and
digital automatic data processing machines. They went primarily to Kenya (24.2
per cent), Tanzania (14.2 per cent), and Djibouti (13.1 per cent).
Meanwhile, Dubai’s 2020 exports to the region totalled $1.97 billion.
Manufactured tobacco, mineral fuels, pearls and precious stones, and plastics
are the main exports. Dubai’s major export markets in Eastern Africa in 2020,
were Somalia (36.8 per cent), Kenya (23.6 per cent), and Djibouti (8.9 per
cent), said the report.
East Africa comprises 18 countries: Burundi, Comoros, Djibouti, Ethiopia,
Eritrea, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Rwanda, Seychelles,
Somalia, South Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.
In terms of real GDP, East Africa ranked as the continent’s third-largest
region, accounting for 15 per cent of Africa’s GDP with an average value of
$355.1 billion. Ethiopia is the region’s largest economy, accounting for 22.7
per cent of its total real GDP in 2020. Kenya comes in second with a 20.5 per
cent share, followed by Tanzania with 17.5 per cent.
Ethiopia and Tanzania also top the list of fastest-growing economies in the
region in terms of real GDP, with a 6.9 per cent CAGR in 2015-2020.
Looking at per capita GDP paints a different picture of the region, where the
top three for 2020 become the smaller nations of Seychelles, with a per capita
GDP of $13,900, followed by Mauritius with $9,500, and Djibouti with $3,200.
Foreign Direct Investment (FDI) is another prominent indicator of economic
performance and in 2020, East Africa was third on the continent in terms of
share of FDIs, accounting for 17.1 per cent of Africa’s $167.8 billion total
inward FDI stocks.
East Africa saw its inward FDI stocks increase by 9.1 per cent in 2015-2020,
highlighting the region’s sustained attractiveness to foreign investors.
Mozambique is the top FDI destination in East Africa, with total FDI stocks of
$45.4 billion in 2020 — nearly 26 per cent of the region’s total FDI inward
stocks. Other major destinations were Ethiopia with a 16 per cent share and
Zambia with 12 per cent.
Dubai holds key to unlocking Africa’s potential
Dubai, one of the world’s fastest-growing city economies, holds the key to
unlocking Africa’s enormous economic potential, Buamim said.
Buamim’s statement came during his remarks at the 6th Global Business Forum
Africa in Dubai earlier yesterday. The forum, organised in partnership with Expo
2020 Dubai, is the largest event of its kind in the region dedicated to
exploring new avenues of UAE-Africa economic cooperation.
“We believe that Dubai holds the key to unlocking Africa’s economic potential,
as one of the world’s fastest-growing city economies that can offer valuable
expertise in key sectors such as logistics, infrastructure, retail, tourism and
finance, in addition to the right level of investment needed to support African
countries scaling up their economies,” Buamim said.
“Hosting this prestigious forum at Expo 2020 Dubai not only adds to the
significance of the business forum but also opens new doors for companies from
the UAE and other markets that are keen to explore untapped business potential
in Africa,” he said.
He said the number of African companies registered with the Dubai Chamber
increased by 15.5 per cent since 2019 to reach 24,800 today said Buamim.
“Judging by economic indicators, it’s safe to say that our efforts in Africa are
bearing fruit. Dubai’s non-oil trade with Africa reached $50 billion in 2020
despite the pandemic challenges, marking the highest level in the last decade,”
He elaborated on the roles of Dubai Chamber’s representative offices in
Ethiopia, Ghana, Mozambique and Kenya, in building bridges between UAE and
African business communities, identifying attractive investment opportunities in
Africa and assisting African companies with their entry into the Dubai market.
Over the last five editions of GBF Africa, interest in the forum and its overall
impact has grown significantly as African and UAE business leaders leverage the
event’s platform to explore concrete business prospects and partnership