One of the largest trade blocs in Africa is targeting a sixfold rise in commercial ties with the UAE as it plans to open an office in Dubai.
Africa trade bloc builds ties with UAE
Commercial ties between the UAE and the Common Market for Eastern and Southern Africa (Comesa) are on course to swell sixfold in the next five years, said the secretary general of the free-trade bloc.
It comes as Comesa plans to establish an office in Dubai to drive trade and draw investment, which represents 19 countries stretching from Egypt to Zimbabwe.
"We should increase trade and investment sixfold in the next five years," said Sindiso Ngwenya, the secretary general of Comesa. "We also expect companies here to look to openings in a market of a collective GDP of [US]$520 billion [Dh1.9 trillion] and a population of 490 million."
A large part of the UAE's trade with Africa is with Comesa, and the country was the bloc's seventh biggest partner in 2011 with bilateral trade of $9.7bn. Investors include DP World, which operates ports in Egypt and Djibouti, and Etihad Airways, which has a 40 per cent stake in Air Seychelles.
The planned office highlights the growing role of the UAE, and Dubai in particular, as a bridge between Asia and Africa. The UAE's modern ports would help it to continue to capture a large slice of transshipment flows, said Rajiv Biswas, the senior director and Asia chief economist at IHS, a global information company. "Where there could be rapid growth in exports is in the chemical sector because the Middle East is the most competitive in the chemicals industry and Africa doesn't have the critical mass or the feedstock to produce it," he said.
Trade was likely to be further bolstered by plans to integrate Comesa with two other African trade blocs to unify trade policies across and create an enlarged free market of 525 million people. Plans to merge Comesa with the East African Community and the Southern African Development Community were on track for the summer of next year, said Mr Ngwenya.
He said the Comesa office would offer companies exporting to the bloc access to trade credit insurance services through the African Trade Insurance Agency, a multilateral insurer.
It would also help to promote opportunities to sovereign wealth funds, private equity funds and banks for investing in infrastructure projects in Comesa. Such openings will be highlighted at the Africa Global Business Forum, planned for May 1 and May 2 in Dubai. Comesa is a co-organiser of the event with the Dubai Chamber of Commerce and Industry.
"The challenge we have is an infrastructure deficit estimated at $90bn for the Comesa region. We also have an energy deficit which affects all productive and social sectors in the region," said Mr Ngwena. "Africa has 60 per cent of its population between the age of 15 and 32, which is an opportunity when you look at in terms of a youthful population that is active so we should be able to attract investment.