The Dubai Airport Freezone Authority (Dafza) said its trade in the first quarter of 2021 rose 4.7 per cent annually to more than $39 billion, as the emirate continues to attract foreign investment, diversify its economy and benefit from improving global trade in the wake of the Covid-19 pandemic.
Dafza, which recorded a trade surplus of Dh2.44bn ($664 million), accounted for 11 per cent of Dubai’s trade during the first three months of 2021, maintaining the same level recorded in the first quarter of 2020, it said in a statement on Saturday.
“Dafza's strong performance in the first half of this year confirms its ability to attract and sustain foreign direct investments,” Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dafza, said. “Our results were an expected response to the recovery of the global trade movement and the opening of markets, proving the high confidence the emirate enjoys globally.”
Global trade is expected to improve this year after a rebound in the second half of 2020 due to pent-up demand for consumer durables from advanced economies, such as cars, according to the International Monetary Fund. The resumption of supply chains in emerging markets also bodes well for the prospects of growth in trade in 2021, the fund said.
Goods including machinery, televisions, electrical equipment, pearls, semi-precious stones and metals accounted for 94 per cent of Dafza's trade, the free zone said.
China was Dafza's biggest trading partner, accounting for 31 per cent of its trade in the first quarter of this year. Trade with China increased 56.4 per cent year-on-year.
“Dafza is keen to continue its engagement with strategic and new markets,” Mohammed Al Zarooni, director general of Dafza, said. “Dafza is adding real value to the existing customers and new companies looking to establish business and trade through the emirate of Dubai.”
The free zone, which supports more than 1,800 companies across more than 20 sectors, will undertake initiatives and projects this year that will “solidify its position as a pivotal economic contributor to the emirate”, Mr Al Zarooni added.
Dafza set a strategic plan at the beginning of the year to target recovering markets as countries started to lift restrictions on global trade flows during the Covid-19 pandemic. Dubai, a regional financial and tourism hub, is further developing its aviation and logistics infrastructure as it seeks to boost trade flows, create jobs and attract high-skilled talent.
Dafza also recorded an 8.3 per cent increase in sales revenue during the first half of 2021, on the back of a rise in the number of new companies, higher demand for logistics units and introducing economic incentives to attract new investors.
A 24 per cent rise in leased areas and an 88.4 per cent annual increase in the number of registered companies drove revenue from new sales during the first quarter, Dafza said.
Of these registered companies, the number of multinationals locating to Dafza climbed 23.5 per cent while the number of registered small and medium-sized enterprises (SMEs) jumped 96.4 per cent, compared with the first half of 2020.
Dubai's economy, which is bouncing back amid a rapid mass Covid-19 inoculation programme, is also expected to benefit from hosting the Expo world fair from October through to the end of March 2021.
“This means the coming phase will be a promising period of recovery that will positively reflect on our economy and the other neighbouring markets,” Sheikh Ahmed said.
During the first half of the year, Dafza signed an agreement with the Securities and Commodities Authority (SCA) to support the regulation, offering, issuance, listing and trading of crypto assets within the free zone.
The new agreement allows companies trading with crypto assets and cryptocurrencies to be licensed within Dafza, with the SCA issuing the relevant approvals and licences.
To support SMEs, Dafza also launched Scality, a start-up programme aimed at attracting local, regional and global tech start-ups to set up and grow in the emirate.
SMEs make up about 95 per cent of all companies in Dubai, employ 42 per cent of the workforce and contribute about 40 per cent of the emirate's gross domestic product, according to government agency Dubai SME.
