Following the implementation of the African Continental Free Trade Agreement (AfCFTA), Dubai’s trade with Africa could see an annual rise of up to 10 percent, according to the latest forecast by the Dubai Chamber of Commerce and Industry.
In a recently held webinar organized by the Dubai Chamber’s representative offices in Africa, the outlook for Dubai-Africa trade and new bilateral business opportunities provided by AfCFTA were discussed in detail.
The AfCFTA will connect 1.3 billion people across 55 countries and create the world’s largest free trade area with a combined gross domestic product (GDP) valued at $3.4 trillion and is scheduled to launch officially in January 2021.
The virtual event, which took place in cooperation with Dubai International Financial Center (DIFC) and ABSA Group, was attended by 340 business personalities from the UAE, Africa and other markets, representing a wide range of economic sectors and industries.
A presentation by Dubai Chamber’s Department of Economic Research noted that the changing dynamics brought about by AfCFTA and the COVID-19 situation created an opportunity for Dubai-based businesses to reposition themselves and explore new African markets as they prepare for recovery.
AfCFTA is expected to unlock new business prospects across Africa, with logistics, cold storage and warehousing, manufacturing, agribusiness, infrastructure, pharmaceutical and healthcare, and technology identified as key sectors and areas where Dubai businesses can capture new opportunities.
A poll conducted during the webinar revealed that 91% of participating business people believe that AfCFTA will strengthen Africa’s relationship with Dubai and the UAE.
“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 strong presence of UAE companies in African markets and vice versa.”
Director, International Offices, Dubai Chamber
Dubai’s trade with Africa has grown significantly over the last five years, recording an 11 percent compound annual growth rate (CAGR). Imports from Africa rose by 14 percent over the same period while exports rose by 13 percent and re-exports by 6 percent. During the 2011-2019 period, bilateral non-oil trade between the two countries reached close to $0.27 trillion.
Further, during the period 2014-2018, the UAE spent $25 billion in Africa, making it the fourth largest foreign investor in Africa after China, Europe and the United States.
A DIFC spokesperson indicated that five per cent of businesses and 10 percent of DIFC’s employees come from Africa. He described Dubai as a preferred hub for African firms seeking access to capital finance.