UAE companies and sovereign wealth funds including DP World and Investment Corporation of Dubai (ICD) are keener than ever to invest in Africa, betting that the high risks associated with the continent will pay off with outsize returns.
DP World, which already has five operations in Africa, including in Egypt, Djibouti and Senegal, wants to forge ahead with more investments despite a legal battle to keep hold of its concession to run Djibouti’s container terminal after the government accused it earlier this year of using bribery to win the contract, said the chairman, Sultan Ahmed bin Sulayem.
Etisalat, the biggest telephone company in the UAE; Dubai Islamic Bank, the emirate's biggest Sharia-compliant lender; and RAK Ceramics are also among UAE companies that have existing business in Africa or are planning to make new ones there.
Mr Sulayem said he planned to make additional investments in Senegal, where DP World, one of the world's biggest port operators, has a good relationship with the new democratically elected government, and would like to find business opportunities in other African countries including Nigeria.
“We look at the opportunities and they are unparalleled,” Mr bin Sulayem said. “Infrastructure is vital and there are challenges including effective and well-applied corporate governance. The continent needs foreign investment, which will only come if there is robust legal, regulatory and physical infrastructure. No one country can develop in isolation from its neighbours and the wider region. Connectivity is vital to open markets, grow trade and thereby grow economies.”
African presidents from Ethiopia, Rwanda and Ghana as well as businessmen including the billionaire Aliko Dangote sought yesterday at the Global Africa Forum in Dubai to encourage foreign investors to come and invest in infrastructure, power and industrial projects – and make bigger returns than elsewhere while helping to propel the poorest continent to prosperity.
Foreign investment into Africa is expected to rise to more than US$80 billion this year following years of lower interest in the continent after the financial crisis, according to analysts.
“Investment from the private sector is essential for African growth, as the continent’s governments have been incapable of managing these large-scale projects and should instead focus their efforts on the education and health sectors,” said Mr Dangote. “Africa offers huge potential for companies looking to invest, as a large market with almost $1.4 trillion in consumer spending.”
Home to one of the world’s fastest growing populations and middle classes, Africa is the last global frontier of investment and in recent years has attracted much attention from investors as many war-torn nations there heal. Yet so far many foreign investors would prefer to buy shares of banks in Africa to get hassle-free exposure to the broader economy rather than get entangled in the kind of problems encountered by DP World in Djibouti when investing directly, noted Stephen Schwarzman, the chairman and chief executive of the private equity firm Blackstone, who was also at the conference.
The UAE’s geographic proximity, existing ties with the continent and status as one of the world’s biggest trading hubs make it particularly well placed to give it a head start in the new scramble for Africa, officials and executives said. The volume of trade between the UAE and Africa is growing at a triple-digit rate, and the UAE is Africa’s biggest trading partner in the Arabian Gulf, said Hamad Buamim, the president of the Dubai Chamber of Commerce.
ICD, which spent $300m last month to buy a 1.4 per cent stake in Dangote Cement, said it was open to making more investments with Dangote Group as a way to increase its investment exposure to Africa.
“We have been looking at Africa for a long time,” said ICD’s chief executive, Mohammed Al Shaibani. “We are looking to do more business with Mr Dangote and we have some things that we are exploring at the moment together.”
mkassem@thenational.ae
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The%20specs
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Specs
Engine: 2-litre
Transmission: Eight-speed automatic
Power: 255hp
Torque: 273Nm
Price: Dh240,000
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
FIXTURES
UAE’s remaining fixtures in World Cup qualification R2
Oct 8: Malaysia (h)
Oct 13: Indonesia (a)
Nov 12: Thailand (h)
Nov 17: Vietnam (h)
How they line up for Sunday's Australian Grand Prix
1 Lewis Hamilton, Mercedes
2 Kimi Raikkonen, Ferrari
3 Sebastian Vettel, Ferrari
4 Max Verstappen, Red Bull
5 Kevin Magnussen, Haas
6 Romain Grosjean, Haas
7 Nico Hulkenberg, Renault
*8 Daniel Ricciardo, Red Bull
9 Carlos Sainz, Renault
10 Valtteri Bottas, Mercedes
11 Fernando Alonso, McLaren
12 Stoffel Vandoorne, McLaren
13 Sergio Perez, Force India
14 Lance Stroll, Williams
15 Esteban Ocon, Force India
16 Brendon Hartley, Toro Rosso
17 Marcus Ericsson, Sauber
18 Charles Leclerc, Sauber
19 Sergey Sirotkin, Williams
20 Pierre Gasly, Toro Rosso
* Daniel Ricciardo qualified fifth but had a three-place grid penalty for speeding in red flag conditions during practice
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
SPEC%20SHEET%3A%20APPLE%20IPHONE%2014%20PRO%20MAX
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COMPANY%20PROFILE%20
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THREE
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
PREMIER LEAGUE STATS
Romelu Lukaku's goalscoring statistics in the Premier League
Season/club/appearances (substitute)/goals
2011/12 Chelsea: 8(7) - 0
2012/13 West Brom (loan): 35(15) - 17
2013/14 Chelsea: 2(2) - 0
2013/14 Everton (loan): 31(2) - 15
2014/15 Everton: 36(4) - 10
2015/16 Everton: 37(1) - 18
2016/17 Everton: 37(1) - 25
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
