UAE at centre of multinationals’ shift towards Africa

Strong transport links are encouraging companies to use Dubai as a springboard for tapping the African market.

A dock worker for the Kenya Ports Authority Mombasa. Many shipments arrive at the port from staging grounds in the UAE. Trevor Snapp / Bloomberg

The UAE is growing in popularity as a base for multinational companies serving the African market.

Strong transport and logistics services combined with its geographic position between the East and West have enhanced the country’s status as a springboard to the continent.

“The UAE has served as a central logistics hub through which to support more and more of our customers across the African continent,” said Peng Xiongji, the UAE general manager of Huawei, the Chinese telecoms infrastructure development company. It opened a logistics facility in Jebel Ali Free Zone last year from which it can quickly ship smartphones and other technology to the GCC and Pakistan, but also to African nations including Kenya and Tanzania.

Huawei hopes the facility will allow it to target greater spending on information communications technology by African governments.

“We can certainly support those projects from the UAE, but to address our customer needs most effectively, we feel there also needs to be investments made in local people and local facilities,” said Mr Xiongji.

The UAE’s links with Africa have swelled in recent years amid rising trade and investments. Trade between Dubai and Africa rose 27 per cent to US$30 billion in 2012 compared with the year before. The Dubai Chamber of Commerce and Industry has been active in encouraging companies in Dubai to boost exports to a continent with a market of more than 1 billion people. It opened a trade office in Ethiopia in 2012 and plans to open others.

As the UAE has built a reputation as a business-friendly destination, some multinationals are even considering relocating their African headquarters to the emirate. While pockets of Africa are still beset with political unrest and terrorism, the UAE has remained a haven of stability.

CBRE, the property consultancy, has experienced a 30 per cent rise in inquiries from businesses considering moving offices from Africa to Dubai.

“The airlines and the pool of talent here are the two critical issues that make people come here,” said Nicholas Maclean, CBRE’s managing director in the Middle East.

“We are seeing a significant increase in companies currently based in Africa which have two difficulties – one is travelling around the continent of Africa and two is staff. Expanding their business to match the growth in GDP is critically difficult and therefore the assumption is that there’s an easier of way of doing that by relocating their business within Dubai.”

Emirates Airline has strengthened its services to Africa in recent years, bringing its total passenger destinations to 26 across the continent. It also serves 15 destinations through its freighter service, SkyCargo. This week the carrier announced the launch from August 1 of a daily linked service between Dubai and the Nigerian cities of Abuja and Kano.

“The country is strategic to Emirates’ global expansion, as is Africa,” said Thierry Antinori, Emirates Airline’s executive vice president and chief commercial officer.

Etihad Airways flies to seven destinations on the continent, as well as to the Seychelles. On Wednesday, the Abu Dhabi-based airline said it was opening a sales office in Johannesburg to serve its newly created Africa sub-Sahara and Indian Ocean region.

In a news release, Peter Baumgartner, Etihad’s chief commercial officer, said: “Africa is quickly developing into the next big investment destination, with business growth on the rise and African economies amongst the fastest growing in the world. We are experiencing strong passenger loads right across the continent.”