HE. Hamad Buamim, President and CEO-Dubai Chamber
DUBAI, United Arab Emirates, 1 September 2014 -/African Media Agency (AMA)/- Ahead of the 2nd Africa Global Business Forum (AGBF) taking place this October in Dubai, the Dubai Chamber of Commerce and Industry, in collaboration with the Economist Intelligence Unit (EIU), has developed a detailed study highlighting economic and investment potential in Sub-Saharan Africa.
Ghana offers a relatively business-friendly environment, however poor infrastructure remains a major obstacle. For retailers, Ghana has the potential to become the gateway to West Africa's 250m consumers.
According to the study, market opportunities are moderate. Mining communities and tourists in coastal towns and the much anticipated growth in population – expected to double in 20 years – will contribute to the development of the retail sector.
Ghana's GDP growth will average 7.5% annually until 2017, driven by the expansion of gold mines and burgeoning oil and gas sector.
The study states that tourism in Tanzania is a vital source of revenue and the economy remains dependent on agriculture and mining.
Real GDP growth is expected to average 7.1% up to 2017, assuming tourism, agriculture, trade and investment pick up while growth in construction will be robust, led by investments in the gas industry and infrastructure projects.
FDI exceeds US$2bn and is expected to increase by 20% per year up to 2017. Mining is the largest source of FDI followed by telecoms and construction. Agriculture has also been targeted by the government as a source of future FDI.
Nigeria emerges as a strong destination for investments in telecoms and retail mainly due to the large population (20% of the Sub-Saharan Africa). It is also a key market to multinationals.
Nigeria's FDI has exceeded US$6bn mainly in the energy sector. Owing to the investment in oil and gas, the economy will remain robust but will not be sufficient for a sizeable improvement in living standard.
Growth is expected to continue until 2017 owing to the investment in the oil and gas sector. Non-oil growth will be robust, led by telecoms, trade and infrastructure.
Kenya's economy has developed into a market-led hub for East Africa's telecoms, retail and tourism sectors.
Growth will pick up to 5.1% a year on average as banking, telecoms and the middle class continue to develop. Prices of food and oil, and drought threat remain key risks.
FDIs are under US$0.5bn targeting mainly telecoms and financial services.
H.E. Hamad Buamim, President and CEO, Dubai Chamber, highlighted that the increase in economic reforms, rising fiscal spending and ties with fast growing economies in Asia are the main factors supporting the economy in Sub-Saharan Africa adding that the AGBF will shed a light on the economic and investment realities in Africa and will give business leaders and decision-makers from Africa, Dubai and the wider GCC region an ideal platform to discuss business partnerships and opportunities.
The study states that investment opportunities are particularly significant in the telecoms sector. Although there are over half a billion mobile subscribers, most countries are still far from saturation and internet access is still almost non-existent in many countries.
It emphasises that with the emergence of middle class in Sub-Saharan Africa, formal retail is starting to develop, offering "value" products aimed at lower income customers while infrastructure needs are enormous, with an estimated US$100bn a year required by the power sector alone.
The President and CEO of Dubai Chamber further stressed that this study is one in a series of studies on Africa developed by the Chamber, and is aimed at introducing businesses in Dubai to investment opportunities available in the continent.
Non-oil trade between Dubai and Ghana accounted for almost AED8.9bn in 2013. Imports accounted for around AED7.4bn and exports and re-exports around AED1.5bn.
Ghana ranks 34th on the list of Dubai trade partners. The most traded commodities include agricultural products, foodstuff, precious stones and metals, wood and construction material.
Challenges, opportunities and cooperation between African and Dubai based companies will be discussed further by leaders and businessmen attending AGBF in October.
Further information on Africa Global Business Forum is available on: www.africaglobalbusinessforum.com
Distributed by African Media Agency (AMA) on behalf of the Africa Global Business Forum.