Africa Rising: First it was China, now the Gulf discovers the African market
A decade ago, many African economies seemed locked in stagnation. Now they are booming, and Gulf investors are moving in to take advantage of the growth.
Abu Dhabi, United Arab Emirates
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The tiny country on the Arabian Peninsula saw about $1.5 billion of trade with Africa each year, barely enough to register on government statistical reports. Other exchanges were also rare: Aside from the occasional international meeting, African ministers rarely had an occasion to frequent the Emirates.
Fast forward just about a decade later, however, and the situation couldn’t be more different.
With two of the continent's major trading partners, the European Union and the United States, struggling to climb out of recession, African economies – many of which are booming – have increasingly looked elsewhere to buy and sell goods. China has been an obvious beneficiary. Less visibly, African countries have dramatically boosted economic ties with the Gulf.
Between 2000 and 2009, trade between African countries and the Gulf Cooperation Council, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates, rose by 270 percent, to more than $18 billion annually. UAE-Africa trade grew even faster, 637 percent – to $14.5 billion annually. The numbers for East Africa are particularly striking: More than 10 percent of imports for both Kenya and Tanzania now come through the UAE, as well as an increasing number of exports. Uganda saw trade volumes rise from $118 million in 2004 to $643 million in 2008, the most recently available year for statistics. Exchange with the UAE now makes up 10 percent of that country’s total trade.
The links don’t end there: The UAE is also increasingly an investor in African infrastructure, technology, and industry.
“Africa is like a goldmine in terms of what’s out there,” UAE Minister of Foreign Trade Sheikha Lubna al Qasemi said recently at a conference at New York University in Abu Dhabi. Already, the UAE holds a host of investments and projects across the continent, from a $400 million investment in Nigerian telecoms to more than $200 million in foreign direct investment in Rwanda. Lubna vowed that the number would only rise further: Africa “represent[s] a considerable opportunity for trade that my ministry is excited about… There are major investments [from the UAE] that have gone toward Africa and more will come.”