Dubai World is a major investor in Comesa, holding 36 per cent of total investments in the region from January 2003 to January 2011.
During the period, 67 companies from the UAE made 150 investments making Dubai World one among the top 10 investors, Jabulile Mashwama, Swaziland Minister of Industry & Trade and chairperson, Comesa Council of Ministers, said, without disclosing the total amount of investments.
Comesa stands for the Common Market for Eastern and Southern Africa and comprises of 19 member states –Burundi, Comoros, Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
Mashwama urged other economies to follow what the UAE has started in the African countries, which she dubs as the “last frontier for development”.
“We invite business in the GCC to seize opportunities in the Comesa region, in the fields of energy, financial services, health, tourism, mining, information and technology and infrastructure,” she said.
The UAE’s trade with Comesa has increased substantially between 2002 and 2008. The volume of exports from the Comesa region to the UAE increased at a compounded annual growth rate of 36 per cent while exports and re-exports to Comesa countries registered a CAGR increase of 47 per cent and 19 per cent, respectively.
Dubai has also long regarded Comesa as a vital and strategic trading partner with the emirate’s non-oil trade reaching Dh26 billion in 2009.
Official data shows that Dubai’s non-oil trade with Comesa has increased five times between 2002 and 2009, from Dh5.21bn in 2002 to Dh26.6bn in 2009. Dubai’s total imports increased by 960 per cent from Dh880mn to Dh9.37bn while total exports/re-exports surged 300 per cent from Dh4.3bn to Dh17.3bn during the same period.
Many, however, are wary that the unrest in the Middle East will impact the flow of trade and investments.
Dubai Chamber admits that in the short-term, it will have an effect but stresses that over the longer-term, trade will resume to normality.
“In the short term, the violence is definitely having an effect, especially in Libya,” it said. “We have seen oil price fluctuations, and trade has been disrupted internally. In the longer term, with political stability, more likely in Egypt, growth will be simpler to realise. Trade will be diverted to other routes like Dubai and the UAE. Dubai has and always will be a stable country.”
Trade imbalance
“There is a big difference between imports and exports because Comesa countries export traditional products while Dubai exports premium and value added products to Comesa,” Mashwama said.
This scenario shows that a successful economy is not reliant whether a country is resource rich or not.
Mashwama said Dubai’s “dynamic entrepreneurial spirit” and its capability to bridge Africa, GCC, Asia and Europe had led it to achieve “more than any of the rest of the world has achieved.”
“The lesson we want to learn from Dubai is its model for sustainable development,” she said. “Dubai has confirmed empirical evidence that prosperity can be achieved even by resource-scarce countries.”
Mashwama cited a report from Dubai Chamber that the emirate produced over 2,000 certificates of origin every 24 hours, which is a major achievement for any aspiring trade hub. “This mirrors the efficient services and sound practices in Dubai, which we have to learn.”
Opportunities
Comesa is the largest economic bloc in Africa with a population of more than $430 million in 2008 and a combined GDP of over $447 billion in 2009. According to Dubai Chamber, Comesa market is expected to exceed 500 million consumers by 2015, offering great potential investment opportunities.
“With larger, more affluent population comes increased demand for consumer goods. This is good news for Dubai exporters,” Dubai Chamber said in a statement. “Quite significantly, UAE investors are already active in agricultural investments. However, apart from buying agricultural land, these investors can also utilize their expertise in helping build farm-to-market roads that would reduce waste and thereby increase productivity of agriculture.”
In addition to trade, there are many other sectors that investors can look at such as tourism, energy, infrastructure, social services and communications.
The market for tourism looks buoyant as Dubai has established itself as a hub for tourists from Asia, particularly China and India, and Europe intoComesa.
Kenya, for one, has well developed game reserves and industry estimates have indicated increase in tourism in Malawi between now and 2012.
Dubai’s tourism sector is booming and can accommodate increase from Comesa. The number of Dubai International Airport passengers rose by 10 per cent to 4.25 million in January 2011 compared to last year. The flow of traffic is expected to rise 11 per cent this year to 52.2 million people, according to Dubai Airports forecast.
The opening of Al Maktoum airport for passengers in 2012 will also open more windows of opportunities. Dubai’s second airport, billed as the world’s largest when it becomes fully operational, is set to have passenger capacity of up to 160 million people a year.
In terms of agriculture, Comesa can assist Dubai with food security thanks to its land resources and strong agriculture sector, which makes up 32 per cent of Comesa’s combined GDP and employs 80 per cent of its workers.
UAE, on the other hand, imports more than 80 per cent of its food. The emirate spent Dh25.5bn on food imports in 2010. The emirate has more than 13,500 food establishments and imports food from more than 150 countries.
Food imports through Dubai increased to about 6 million tonnes last year. About 65 per cent originates from countries with emerging economies.
In the field of energy, Comesa offers wide opportunities in development since its resources are still underdeveloped. This includes infrastructure such as electricity transmission and distribution networks, petrol and gas pipelines. Comesa estimates actual demand for electricity in the region already exceeds supply by more than 20 per cent.
Renewable energy projects such as hydro-power, bio-mass are using sugar cane for biofuel production.
The region needs to cope with increased tourism hence better airports, seaports and utilities are needed to facilitate increased trade flows.
Communications-wise, the region lacks the proper infrastructure thus opportunities can be seen by establishing joint ventures. As the population increases, there will be a bigger demand for communication infrastructure specifically in internet and broadband.
Follow Emirates 24|7 on Google News.
