Hamad Buamim, president and CEO of the Dubai Chamber of Commerce and Industry, has launched the 2nd Africa Global Business Forum, an exclusive event at the Atlantis hotel in Dubai joining 500 VIP delegates from Africa and the GCC’s political and business leadership to discuss African investment.
The forum begins a day after the release of a study by the Chamber and the Economist Intelligence Unit revealing that Gulf States have provided $30bn in funding over the last decade to develop African infrastructure, largely to support infrastructure development.
Of that total, approximately $15bn was given in grants and loans from Gulf development agencies while $15bn came through direct investments, while moving forward, the study noted, Gulf investment into African infrastructure could average $5bn annually.
“Dubai’s message is clear,” expressed Hamad Buamim. “We desire developing sustainable business partnerships, and we seek our African partners to use Dubai to connect Africa to the world, and the world to Africa.”
More than half of GCC aid inputs into Africa have funded transport projects, particularly roads building, with about 30% allocated for power projects ranging from hydroelectric dams to rural electrification, and a further 15% contributing to water projects.
However, Africa’s telecoms sector received the majority of investments from the GCC’s private sector, followed by ports and power generation, and there are rapidly expanding investment trends into the emerging markets for Islamic finance and consumer goods.
“Risks from operational problems, non-honouring of contracts, currency volatility, political risks and change of government and policies, especially relating to long-term projects, are among the main concerns for Gulf investors,” the Dubai Chamber study noted.
Nevertheless, explained Buamim, despite the challenges that waylay investments from the Gulf, the continent offers broad opportunities to both large corporates and also smaller firms.
“Our study has revealed that given the perceived risks associated with mega-projects in several African markets, smaller-scale projects have becoming increasingly more appealing, especially in the energy industry,” he said.
At the recent West Africa Investment Forum, GCC companies committed to projects worth $19bn in various infrastructure in Africa, led by commitments from the UAE’s Trojan General Contracting, the UAE’s Essar Projects and Oman’s Hasan Juma Backer Trading & Contracting.