Recently the UAE was ranked among the 50 top destinations for start-ups in the world, according to a list of the 100 best countries for start-ups by Zurich-based research company StartupBlink.
This should come as no surprise to those of us who have arrived in the UAE, starry eyed with big ambitions soaring into the clear desert sky, just like the Burj Khalifa. The UAE provided us the nurturing ecosystem to see our start-up dreams to fruition.
Growing trend of Indian firms working for UAE companies is reflected in the changing working week from Sunday to Thursday
There are many factors that make the UAE such an attractive destination for entrepreneurs. Among the soft infrastructure, I would count the refreshing lack of red tape, transparent legal processes for setting up a business and a can-do spirit. Then there is the UAE’s geographical location – at the crossroads of east and west – which makes it an ideal base for export-oriented businesses.
For foreign investors, the UAE continues to be an attractive destination. It was ranked 19th worldwide in the 2020 Kearney Foreign Direct Investment (FDI) Confidence Index – a commendable achievement that is based on strong fundamentals, such as the government’s continued commitment to economic diversification, innovation, infrastructure and ease of doing business.
The UAE’s visionary leadership realized the significant role that start-up ecosystems can play in diversifying the economy, job creation, attracting talent and improving the quality of life of UAE citizens. For example, Jebel Ali Free Zone (JAFZA), an infrastructure hub and ecosystem, has grown from just 19 companies in 1985 to more than 7,500 companies today, with hundreds of global giants headquartered here and serving the wider Middle East region, Europe, Africa and Indian subcontinent.
Substantial investment in multimodal infrastructure and logistics hubs such as JAFZA ensured that during the COVID-19 crisis, UAE residents did not suffer from shortages unlike in other countries.
For export-oriented start-ups, making JAFZA a base is almost a no-brainer. It ticks all the boxes for the ecosystem needed for such a business model – offering end-to-end solutions and opportunities to connect with trade partners and logistics providers to reduce costs. Operating out of Dubai, exporters and re-exporters can smoothly and easily access targeted markets in Africa, and achieve significant sales and revenues.
As a start-up founder, my priority was accessing Africa’s untapped markets. On the back of rapidly expanding UAE-Africa trade ties, Dubai’s superb infrastructure facilitates businesses that re-export to Africa.
With non-oil trade between the UAE and Africa since 2011 valued at around $1 trillion, and the untapped potential of UAE exports to Africa valued at around $3.6 billion, according to the Dubai Chamber of Commerce and Industry, there is no dearth of high-value trade and investment opportunities for both markets.
New African markets have opened up to the UAE, with trade agreements and easing visa rules stimulating bilateral trade. Despite the delays caused by the coronavirus pandemic, when the African Continental Free Trade Area (AfCFTA) comes into force, it will further benefit UAE trade, unlocking unprecedented opportunities in bilateral trade, investment flows and a new chapter in economic cooperation. Once it is in force, AfCFTA will be the biggest free trade agreement in the world, bringing the continent’s 54 countries and 1.3 billion people into a single market.
As economies around the world embark on their journey of recovery, the UAE’s sustained investment in building logistics and infrastructure will propel it to prime position as a gateway to African markets. The UAE is also deeply invested in Africa’s socio-economic development, funding infrastructure projects across sectors from transportation and telecom to power generation and real estate and paving the way for businesses to support African economies.
This is why I feel optimistic about the future of the UAE and the untapped potential of Africa. Despite the current challenges, staying the course with strong fundamentals and political will, the recovery will be certain.
Prateek Suri, founder, MASER