The Common Market for Eastern and Southern Africa (Comesa) is increasingly marketing itself as an attractive investment destination given all the greenfield opportunities the region has to offer. To capitalise on this, Dubai is marketing itself as the ideal location from which international companies can access these emerging economies, a message that was highlighted at the fourth Comesa Investment Forum held in Dubai in March.
The United Arab Emirates, and Dubai in particular, believes there are many benefits to be gained by strengthening its economic co-operation with Comesa. For example, Dubai is a hub for tourist flows from Asia (especially China and India) and Europe into the Comesa region and therefore is well positioned to increase the flow of tourists to Africa. Comesa can also assist Dubai with food security because of the availability of large tracts of land and a strong agricultural sector, which makes up about 32% of Comesa’s combined GDP and employs 80% of its workers, according to the Dubai Chamber of Commerce (DOC). In contrast, the UAE imports more than 80% of its food, spending $6.9bn on food imports in 2010, DOC statistics show.
And while political upheaval across north Africa is impacting upon oil prices and trade flows, the situation for the UAE is expected to remain favourable. As the UAE is politically stable, trade will increasingly be diverted through the country, primarily Dubai, according to the DOC.
Trade between the UAE and Comesa has also increased substantially between 2002 and 2008. The volume of imports from the Comesa region to the UAE increased at a compounded annual growth rate (CAGR) of 36%, while exports and re-exports from the UAE to Comesa registered a CAGR of 47% and 19%, respectively.
Comesa is the largest economic bloc in Africa, comprising 19 countries, with a population of more than 430 million people and a combined GDP of more than $447bn. By 2015, its population is expected to surpass 500 million.
Comesa’s Custom Union was launched in 2009 and now further integration is sought. The key areas where the Comesa region is seeking investment are: infrastructure development, agriculture, roads and railways, logistics and supply chain management, aviation, finance and banking, tourism and energy.
Lucia Dore is the head of GCC and Middle East at mergermarket, part of The Financial Times Group. E-mail: firstname.lastname@example.org