Dubai is becoming a gateway to promote economic cooperation between the Gulf countries and Africa, which enjoys strong and long trading links. Besides, GCC countries are major investors in the African region. Dubai is now acting as a regional hub for transport, logistics, and trade and increasingly finance for trading with Africa. This strategic advantage can be leveraged for the mutual advantage of the region.
While UAE has emerged as the second largest investor in Africa, after China in the recent days, analysts are betting that the present level of economic cooperation can leapfrog, given the affinity and cordially between the two regions. Significantly, Abu Dhabi leads the way in striking newer paths for investments, having funded more than 66 projects in 28 African nations to a value of US$16.6bn.As the latest as in 2018, the state-owned fund allocated US$50m for UAE companies for investing in the Central African nation of Chad. There are also other agencies in the fray. For instance, the Khalifa Fund for Enterprise Development, an independent agency of the Abu Dhabi Government, signed a US$100m partnership agreement with Ethiopia’s Ministry of Finance to help fund prominent projects in that country.
While security remains a major concern of the Gulf enterprises operating in Africa, there are focused areas where the investments are channelized. Agribusiness is one of them. Saudi Arabia has acquired 500,000 hectares of arable land in Tanzania in 2009. This huge tract of land is going to be cultivated to assure food security to the region, where the demand for foodstuffs is expected to grow at a rate of 3,3% annually. This has to be seen in the context that at present hardly 5% of Africa’s land is cultivated. More such land deals are expected in the future, which will be advantageous to the desert economies of the region.
Africans also have started investing in GCC countries. Over 12,000 African businesses are registered with the Dubai Chamber of Commerce and Industry. Most of them have been using Dubai as a base to attract investment into their own countries. Dubai has increased non-oil trade with Africa by as much as 700% over the past 15 years, according to figures collated by DUBAI Chamber of Commerce and Industry.
