Dubai Chamber: African Continental Free Trade Agreement could boost Dubai-Africa trade by 10% over the next 5 years
Dubai’s trade with Africa could see an annual increase of up to 10% over the next five years following the implementation of the African Continental Free Trade Agreement, AfCFTA, according to Dubai Chamber of Commerce and Industry’s latest forecast.
The outlook for Dubai-Africa trade and new bilateral business opportunities created by the AfCFTA were among the main topics covered during a recent webinar organised by Dubai Chamber’s representative offices in Africa. The virtual event, held in cooperation with the Dubai International Financial Centre, DIFC, and ABSA Group, was attended by 340 businesspeople from the UAE, Africa and other markets, who represent a wide variety of economic sectors and fields.
A presentation from Dubai Chamber’s Economic Research Department noted that changing dynamics brought forth by the AfCFTA and the COVID-19 situation have created an opportunity for businesses in Dubai to re-position themselves and explore new African markets as they prepare for recovery.
The AfCFTA, set to officially launch in January 2021, is expected to unlock new business prospects across Africa, with logistics, cold storage and warehousing, manufacturing, agribusiness, infrastructure, healthcare and pharmaceuticals, and technology, identified as key sectors and areas where which Dubai businesses can tap into new opportunities.
Dubai’s trade with Africa has increased significantly over the last five years, registering a compound annual growth rate, CAGR, of 11 percent. Over the same period, imports from Africa increased by 14 percent, exports increased by 13 percent and re-exports by six percent. Bilateral non-oil trade reached nearly AED1 trillion ($272 billion) over the 2011 to 2019 period.
“The AfCFTA will offer a huge opportunity for the UAE’s investors who will be able to do business on a single set of trade and investment rules across the African continent. Dubai is well placed to benefit from the landmark trade agreement due to its status as a preferred re-export hub for African traders and the strong presence of UAE companies in African markets and vice versa,” Omar Khan, Director of International Offices at Dubai Chamber, said during his welcome remarks.
Salmaan Jaffery, Chief Business Development Officer of the DIFC, revealed that five percent of companies and 10 percent of the workforce at the DIFC are from Africa. He described Dubai as a preferred hub for African companies looking to access capital finance, adding that DIFC has witnessed an accelerated trend in investment to support smaller companies navigate the COVID-19 situation and larger projects for digitising African economies.
Cheryl Buss, CEO, Absa Group highlighted emerging opportunities across different economic sectors in Africa ranging from power and utility, infrastructure, agriculture, natural resources and oil and gas. She noted that the group has active corridor links supporting China Africa trade and Middle East, Asia Africa trade, adding that the MEA corridor is increasingly becoming an important area for strategic investments.
A poll conducted during the webinar revealed that 91 percent of participating businesspeople believe that AfCFTA will strengthen Africa’s relations with Dubai and the UAE. The UAE has invested $25 billion in Africa over the 2014-2018 period, making it the fourth-largest global investor in Africa after China, Europe and the United States.
Connecting 1.3 billion people across 55 countries, the AfCFTA will create the largest free trade area in the world with a combined gross domestic product valued at $3.4 trillion.