THE EMERGENCE OF AFRICA AND HOW DUBAI IS HELPING
This month, I participated in ‘AFSIC – Investing in Africa’ as a speaker and panelist to discuss the topic, ‘This is Africa’s Century, an Overview of Africa’s Economic Emergence’, moderated by Titus Nampala alongside fellow panelists John Fischer from Accion, Sanjeev Gupta from Africa Finance Corporation, Nitin Nowjee from LeapFrog Investments, and Joerg Weber from MUA ltd.
As a Mauritian, an African, and a chartered accountant having worked in the financial services industry for more than 15 years, this is very much a subject close to my heart, professionally and personally. At DTOS UAE I work with some of the most progressive and dynamic start-ups, enterprises, and entrepreneurs coming out of Africa and into Dubai. Dubai is edging towards becoming the business and start-up capital of the world – in previous articles we’ve looked at why the United Arab Emirates is such a sought-after destination, not least due to the expected 5% rise in its economy this year.
As I prepared for the panel, I asked myself three questions. Here are the thoughts I took to London and the three questions I asked of myself, the panelists, and the audience.
- What is the real challenge Africa is currently facing?
- How can we overcome that challenge?
- How is Dubai helping African businesses and entrepreneurs?
Firstly, and most importantly, Africa has a reputational issue. Living in Dubai I engage with people from around the world and the sentiment I hear most often is, ‘Africa looks like it has potential, but it’s too risky for me and my business’. Why? I ask, and the answer is invariable the same – Africa is home to corruption, conflict, and political instability.
So, let’s discuss “Africa”, the second biggest continent in the world, after Asia, with 54 countries from its largest, Algeria, to its smallest, Seychelles.
What if I told you four things?
One: Africa has a plan! The African Union, which is made up of 55 Member States which represent all the countries on the African continent, have adopted the African Union Agenda 2063, a 50-years’ plan to 2063. The stated goals of the AU Agenda 2063 are economic development (including the eradication of poverty within one generation), political integration (in particular through the establishment of a federal or confederate United Africa), improvements in democracy and justice, establishment of security and peace on the entire African continent, strengthening of cultural identity through an “African renaissance” and pan-African ideals, gender equality, and political independence from foreign powers
Two: Young Africans are expected to constitute 42% of global youth in 2030 and Africa’s youth has been anything but passive so far. The millennial generation has lived through the continent’s rapid rise in mobile and internet penetration rates. Today, African youths are increasingly taking an active role in shaping their future. In various countries in Africa, fully fledged start-up scenes are disrupting how we think about African agriculture, industry, IT and sustainability.
In most cases, these businesses are headed by Africans under the age of 35. In fact, 2021 Start-ups in Africa secured over $2 billion in funding.
Three: Many countries in Africa are success stories that need to be told.
- Botswana was one of the poorest countries in the world at the time it obtained independence and is now one of the world’s fastest growing economies, averaging about 5% per annum over the past decade. Botswana’s Global Credit Rating by S&P is BBB+ meaning that the country’s rating is now higher than countries including Italy, Egypt, Bahrain, Cyprus, Mexico, Hungary, and Bulgaria.
- Rwanda, which has a B+ Global Credit Rating, is currently being hailed as the financial gateway to Africa following the set-up of Kigali International Finance Centre, and will soon see the opening of our next DTOS office.
- Kenya’s M-PESA, which has become the benchmark for successful mobile money launches and operations, is also a story to be told to show Africa’s evolution and potential for the 5 decades to come.
Four: out of the top 50 most dangerous cities on earth , US cities account for four of those, and only South Africa with three cities makes the list for the whole of Africa.
Surprising to read? As I said during my panel discussion, Africa needs some serious rebranding and those of us who know Africa should be talking about the success stories, we want people to be confident about Africa. Botswana and Rwanda are shining examples of how a nation’s growth and international investment can be positively impacted by aligning its legal and financial infrastructure with internationally agreed best practice, such as good governance, financial reporting, and internationally recognized financial compliance. While that may not sound extraordinarily glamorous, it’s the reality of what countries across Africa need to do to be taken seriously in the global economy. With the right culture of governance, setting benchmarks, and the right branding, we could see a wave of change across all of Africa.
So, where does Dubai fit in?
Dubai is seeing unprecedented growth – according to the Dubai Chamber of Commerce, there are over 21,000 African companies in Dubai. The emirate has worked hard to improve its standing within the international financial community, from working to remove itself from black and grey money-laundering lists to improving its credit rating to AA, and has a stringent set of regulations and laws to regulate and safeguard the businesses of the UAE.
This helps Africa in two ways. Firstly, Dubai and the United Arab Emirates provide a good platform, with the good infrastructure, governance and regulations, for the flow of capital into and returns from the African continent to investors. This flow of capital is an important, if not vital, part to achieving the goals set in the AU Agenda 2063 , namely in terms of improvement to infrastructure, youth development and education, health care etc.
Secondly, the United Arab Emirates can be a model in terms of adherence and implementation of regulations and laws of international standards. Like most of the African countries, the UAE is a young nation (with the seven Emirates coming together only in 1971) and has successfully adopted and implemented regulations and laws that encourage and protect FDIs in a relatively very short period.
This process has already started with individual African companies based in the UAE implementing, across the whole organization, best practices in terms of governance as well as compliance with the local regulations.
Where DTOS can help
If you are an organization looking to invest or trade in or from Africa through the UAE, it is important to consider that navigating through the UAE legislations and measures can be tricky as the laws can evolve overnight as part of UAE’s determination to always adhere to best international practices and standards. At DTOS UAE we have helped numerous African or Africa-focused businesses and entrepreneurs to set up in the UAE and to be fully compliant at all times.
Author : Terry Antoinette, Managing Director – DTOS UAE