The United Arab Emirates (UAE) is seeking to tap into the financial muscle of rich Africans and other investors around the world, from friendly countries, in a shift in strategy meant to recover from the pandemic by profiting from warm ties.
The details are contained in a special prospectus for an upcoming investment conference in March 2022, in which the Emirati government wants to cement its role as an attractive destination for Africans seeking to diversity their investments.
Traditionally the largest Middle Eastern investor in sub-Saharan Africa, worth more than USD1.2 billion, the UAE government now says it is open to investors from the continent in a show of reversed roles, but which officials say are meant to benefit both sides in the long run.
The statement was released ahead of the Annual Investment Meeting (AIM) a platform the UAE government has traditionally used to market its opportunities to investors as well as enhance networks.
On March 29 and 30, investors and political leaders are due to gather under the auspices of the Emirati government to discuss, among others, a response to the Covid-19 pandemic and strategise attracting foreign direct investments.
Officially, the statement says AIM will seek to discuss investments that can withstand shocks such as those of the Covid-19 pandemic, or environmental disruptions under the theme of “Investments in Sustainable Innovation for a Thriving Future.” And the UAE it wants to market its attractiveness to investors, especially from African countries, by providing absolute ownership of companies for foreigners, easing immigration procedures and providing tax relief as long as ten years.
“To achieve our goal of attracting foreign direct investment, we offer a number of incentives to investors, such as zero personal income tax, 100 percent foreign ownership, and a 10-year golden visa,” explained Dr Thani bin Ahmed al-Zeyoudi, Emirati Minister of State for Foreign Trade, in a statement on Thursday.
Enhance global reputation
“For the past 10 years, the Annual Investment Meeting has played a crucial role in bringing in foreign investment to the UAE. Our focus is now on enhancing UAE’s international reputation as an investment hub and mobilising concrete investments, along with bringing in solutions for sustainable economic growth.”
The UAE has been Middle East’s investment hub for the last decade, but rising competition from rivals is forcing authorities to look for investors in countries they have traditionally sent their money. According to a study by the Horn International Institute of Strategic Studies in Nairobi, the UAE pumped more than USD1.2 billion into sub-Saharan Africa’s development projects, humanitarian aid as well as social and diplomatic engagements.
The Institute’s study, Africa-Middle East Relations: Interests, Strategies, Interventions, and Impact, shows that the UAE is more involved in the Horn of African region where it has logistics projects, infrastructure, oil and energy, telecommunication, agriculture, and tourism, as well as security engagements to protect own turf against security threats. The study said UAE is only behind China in Africa in terms of investment, and has footprints also in Senegal, Mozambique, Egypt, Algeria, Rwanda, DR Congo.
The AU officials say they intend to attract as much as USD150 billion from usual and new investment partners including from Africa. The country was among the top 20 economies in the world whose FDI increased more than three times in the first half of 2021, in spite of the pandemic, to USD424 billion in total.
UAE launched stimulus post-pandemic programmes including tax holidays. In 2022, officials said they will award the best investment promotion agencies for supporting FDI projects that have contributed to their markets’ growth and expansion, including trade with the UAE.
Lessons from pandemic
Dawood Al Shezawi, the President of the AIM’s organising committee said the UAE will build on lessons learnt from the pandemic, including promotion of tech to ease trade.
Investors, though, will have to adhere to the sustainable development goals which means only projects that support the environmental conservation and are based on social and proper corporate governance regulations will be admitted and supported.
Projects that also promise to advance the role of smaller economies by promoting cheaper ways of supplying products to the market will be given priority, as do those that support digital competitiveness, the prospectus said.