What is the Dubai Chamber of Commerce and Industry doing in Africa?
Looking ahead, the Dubai Chamber will play its part to encourage more investment by opening a series of overseas offices in key locations across the continent. Our first, which is in the final stages of preparation, will open in Addis Ababa, Ethiopia, and will be followed by more over the next three to five years.
What areas of investment will the Africa Global Business Forum focus on?
The Dubai Chamber has identified a number of key sectors that can be targeted for investments:
Trade – Dubai’s position as an international re-export hub can be utilised for trade to and from Africa. Trade is a major growth area for Dubai investors. Dubai’s non-oil trade with Africa in 2002 valued AED10.6 billion ($2.89 billion), which has increased to AED84.8 billion ($23.09 billion) by 2011. This is a rise of 700% and the upwards trend is set to continue in line with Africa’s rising populations and affluent middle classes.
Finance – An under-resourced sector in Africa on the whole, some countries fare better than others. Opportunities exist for Dubai to export its expertise in Islamic finance.
Logistics – Long distances and storage difficulties mean that great opportunities exist for warehousing and distribution services across Africa. Logistics is a core economic driver in Dubai.
Agribusiness – Agriculture remains the biggest employer in Africa and agribusiness has the potential to drive the continent’s development. Industries based on agriculture and service companies will not only have to look to supply their home markets but also be substantial exporters. The UAE imports more than 80% of food, spending AED25.5 billion ($6.94 billion) on food imports in 2010. Dubai has more than 13,500 food establishments and imports food from more than 150 countries.
Tourism – Dubai is a hub for tourist flows from Asia (China, India) and Europe into Africa. Emirates airline flies to 22 different Africa destinations and is a key element in increasing connectivity. Dubai can be an air hub for international passengers into and out of Africa. At the same time, Dubai’s tourism sector is booming and can accommodate increases in the number of tourists coming from Africa.
What are some of the challenges of doing business in Africa?
Africa’s sheer size and scale can make it difficult to do business across its borders. The continent is home to 54 different sovereign states, each with uneven development, numerous small markets and varied practices and regulations. However, one approach is to segment Africa regionally, which its policy makers encourage and where Africa’s regional economic communities have either established free trade areas or are working towards it. At the same time, competition can be a challenge nowadays with the continent becoming more of a focus for FDI. Expectations of African stakeholders have increased with this and so investors need to look beyond fast returns and once-off projects to long-term growth and development.