UAE's advanced logistics industry makes it well placed to export to Africa

CAPE TOWN — The United Arab Emirates (UAE) is well positioned to export to African countries due to its developed logistics industry, the CEO of the UAE Trade Center told Al-Monitor.

The center offers Emirati companies a one-stop exporting solution to take their business into emerging markets in Africa. The initiative facilitates meetings for small- and midsize enterprises with potential business partners either in the UAE or in Africa.

The UAE Trade Center mainly focuses on East Africa, with an office in Nairobi, Kenya, but CEO Walid Hareb Al Falahi said he is looking to connect Emirati and West African businesses, starting in Accra, Ghana, where the business is working on a 100-megawatt solar project.

Speaking about what gives the UAE the edge over other countries in the region to export to Africa, Falahi said logistics are “the game changer.”

“Today we are able to hedge logistics. For now, it is Dubai to East Africa, but our aim is also West Africa. We are working on that,” Falahi told Al-Monitor at the African Continental Free Trade Area (AfCFTA) Business Forum in Cape Town on Tuesday.

“We are growing as a trading hub. Sometimes in Dubai, you get products cheaper than in China. Goods are always available. Logistics are very competitive,” he said.

The UAE could play an increased role in trading with Africa but also invest in large projects in the fields of energy, infrastructure and agriculture, Falahi noted.

“Agriculture because of the food security drive. The country [UAE] has a mandate to develop our food security basket,” he added.

The UAE and Kenya are looking to deepen economic ties. Talks over a comprehensive economic partnership began in earnest at the end of last year. The partnership will be the first of its kind between a Gulf Arab state and an African country, the Emirati news agency WAM reported last July. Through the partnership, the two countries aim to remove trade barriers on a wide range of goods and services, boosting opportunities for importers and exporters.  

Another African country the UAE Trade Center has considered trying to work more with is Egypt, but Falahi said it is currently a better place to source capital and products than to export to, due to the costs. He explained that although the country has a huge manufacturing market, it does not have a strong e-commerce industry, making demand for products from the Gulf weak. 

“Egypt is one of the countries that is very close to my heart but when you look at the logistic connectivity, it's very weak between Egypt and Africa,” Falahi said.

Indeed, Egypt trades little with the rest of the continent — only 15.4% of its exports go to African countries, according to the Organization for Economic Cooperation and Development. Most of its exports go to Europe and Western Asia.

Despite being one of the “biggest powerhouses of Africa” when it comes to products and services, it has an underdeveloped logistics sector, Falahi said.

He added that the UAE Trade Center was even looking at leasing some wide-body aircraft to help transport products to different areas of Egypt and develop its imports from the UAE.