2 May 2013
South Africa and the rest of sub-Saharan Africa present significant potential for business investment by companies in the Middle East, according to a report released by the Economist Intelligence Unit in Dubai on Tuesday.
The findings were announced by the Dubai Chamber of Commerce and Industry as part of the Africa Global Business Forum 2013, hosted in Dubai on 1 and 2 May.
South Africa already has an established relationship with the United Arab Emirates, and the forum was organised to explore opportunities for further cooperation.
“[South Africa’s] relationship with the UAE is well-developed and bilateral trade and FDI flows are strong,” the report said. “The business environment is among the most advanced in sub-Saharan Africa and the private sector is well-established.
“Sub-Saharan Africa is now competing with Asia to become the world’s fastest growing region,” the report said.
The report said Africa’s growth was driven by rapid urbanisation, a young population and emerging middle class.
“Africa offers the highest return on foreign direct investment in the world, according to the UN trade agency UNCTAD,” said the Dubai Chamber of Commerce’s director-general, Hamad Buamim.
Key sectors such as agriculture, banking, infrastructure, retail and telecommunications offer numerous opportunities. “Business perceptions of sub- Saharan Africa are changing,” said regional director of the Middle East and Africa at the Economist Intelligence Unit, Pratibha Thaker.
“Structural changes over the past decade have brought more political stability and economic growth to the continent, despite some marked exceptions.”
There are also a number of challenges to doing business on the continent, and the report identified limited infrastructure, skills shortages, poor governance and inconsistent policy making as the biggest obstacles to investment.
The Africa Global Business Forum was organised to examine how both the public and private sectors can form partnerships to overcome these obstacles.
“Successful investment in Africa requires a complex view of the continent, given the diversity of markets, business environments, legal systems, social groups and political systems,” Thaker said.