How the predicted boom in Africa's maritime sector has caught the attention of Middle East investors.
It is a commonly cited adage that the world's second-largest continent is also its most underdeveloped. For years, Africa has been left behind while investors have piled into the emerging economies of the Gulf and South Asia.
One of the biggest problems faced by the region has come from its lack of infrastructure; the absence of an effective transportation network has significantly diminished its potential to export products. But all that could soon be set to change.
Sultan Ahmed Bin Sulayem, chairman of Dubai World, believes that investment in the continent's infrastructure could hit US$250 billion in the next 10 years: "Dubai World's focus on Africa is in line with Dubai's strong, time-tested trade relations with the continent".
His comments came at last month's World Economic Forum on Africa, where he revealed that Dubai World would be investing $4 billion in several African countries over the next few years. The announcement follows a tour of the continent's west coast, where Bin Sulayem discussed infrastructure development projects with leaders who have placed the issue at the top of their list of priorities.
"African leaders with commitment, vision and drive are actively pursuing investment in their countries and we are very pleased to be working with them," remarks Bin Sulayem.
Long-term partnerships to invest in much-needed infrastructure such as ports, business parks and logistics centres, roads and rail also create long-term economic benefits by stimulating business and the economy. When combined with investment in education and training in people, it creates wealth and economic stability on which to build a sustainable future."
In the past, infrastructure investment in Africa initially came from Chinese state-owned companies. Subsequently, perhaps in recognition of the economic potential the continent presents, Dubai World began to establish a strong African presence several years ago. But the Asian economic powerhouse remains one of the biggest investors in African infrastructure, with projects running in most of the continent's states of strategic value. Perhaps owing to the high-risk factor associated with political instability in the region, the majority of the funding for these projects has come from state-owned Chinese banks.
During an interview with the Reuters news agency, Bin Sulayem denied that Dubai World was competing with Chinese companies over Africa, arguing that the continent was substantial enough to accommodate more than just one business interest.
Dubai World Africa, the group's African investment subsidiary, recently acquired three world-famous South African game reserves - Shamwari Game Reserve, Sanbona Wildlife Reserve and Jock Safari Lodge - which are members of the Mantis Collection. This move has added to the company's portfolio of prime African properties, which also includes several tourism resorts, game reserves and luxury hotels across the continent, including the much-lauded V&A Waterfront in Cape Town and Gorilla's Nest Lodge in Rwanda.
Africa has an abundance of natural beauty and the opportunity to provide a unique experience for travellers in a way that is sustainable and ecologically sound," Bin Sulayem says. "We have invested significantly in game parks and reserves throughout Africa and see a bright future for these destinations."
DP World, the group's global marine terminal operator, has high-profile bases in Sokhna (Egypt), Djibouti, Mozambique and Senegal, which are lifelines to Africa's economy on a number of different fronts.
Jafza International, part of Dubai World's Economic Zones World, has also made major investments in Djibouti, Senegal and Morocco, and the free zone operator is now expanding its presence in further locations, including resource-rich Libya.
Together, the port and free zone have been instrumental in the development of Dubai as the leading business hub in the Middle East," Bin Sulayem commented in a statement.
Today about one-fourth of Dubai's GDP is contributed by Jebel Ali Free Zone, and Dubai World has the capability and the expertise to replicate this model anywhere. With solid infrastructure in place in Africa, and excellent human resources, other development, such as real estate, retail properties and tourism can also be established, thus contributing further to the economy."
During his tour of Africa, Bin Sulayem visited Equatorial Guinea, Gabon, the Republic of the Congo, Mali, Senegal, Mauritania, Sierra Leone, Nigeria and Benin. In a meeting with Congolese President Denis Sassou Nguesso, he discussed the possibility of investing in the Pointe-Noire port in the Republic of the Congo and the construction of a logistics park to support it.
It is not clear whether the development mentioned in the meeting with President Nguesso was included in the final package of investment unveiled at the beginning of the month, although it is clear that it would represent a major strategic move for the company.
The Republic of the Congo has a significant amount of untapped natural resources, including reserves of petroleum, wood, potash, lead, zinc, uranium, phosphates and natural gas, as well as hydroelectric power potential. During his discussion with President Nguesso, Bin Sulayem was said to have expressed an interest in investing in mining. More than 85% of the country's export earnings are currently tapped from petroleum and petroleum products.
Aside from offering massive financial gains to companies rich enough to invest in infrastructure developments, it is clear that the continent itself is also experiencing unprecedented benefits.
Borge Brende, managing director of the World Economic Forum, expects that the African economy will increase by 5.9% this year and predicts that the continent will maintain its healthy growth momentum through to 2009. His view is shared by Dubai-based experts.
"For countries to grow and develop they must be able to access global markets for imports, exports and to attract investments," says Dr Cedwyn Fernandes, Chair of the College of Graduate Studies in the University of Wollongong, Dubai. "Most countries in Africa are landlocked and have poor road and air transport links, thus paying the costs of being excluded from the wider global economy."
With the World Bank's Logistics Performance Index (LPI) showing that most African countries are languishing towards the bottom of the index, there is clearly substantial scope for growth.
"For DP World, this challenge presents itself as an opportunity, firstly to contribute to the development of the region and secondly to strengthen its logistics hub in Dubai by expanding links to the African continent," continues Fernandes.
"DP World will also be welcomed by the various governments of the region and will have a great first-mover advantage, which makes investing in Africa an exceptionally attractive long-term investment."
Existing trade between Dubai and African states is already booming and the recent investment is above all a means to strengthen that. But trade with Africa is not without its risks. Regional conflicts and turmoil habitually cast a shadow over economics prospects. Increasing unemployment, inflation and a widening wealth gap also create the kind of social instability that is harmful to sound economic development.
The profitability of DP World's port in Djibouti itself could also be threatened by a border dispute brewing between the tiny African state and its equally diminutive neighbour, Eritrea. At the end of May, a British newspaper reported that the two countries' armed forces were squaring off against each other on their mutual border, an area of land which is instrumental in determining who has control over the vital Red Sea shipping lanes.
A spokesman for DP World was unavailable to comment on whether the mounting conflict would be likely to affect business. However, indirectly addressing the issue of stability in the region, Bin Sulayem sought to reassure shareholders.
"The company is selective in seeking new business prospects because prudent investment is in the best interest of our stakeholders," he stated. "Africa is a solid investment base with conditions favourable for growth both for the company as well as for the host economy.Dubai World's focus on Africa is in line with Dubai's strong, time-tested trade relations with the continent.