- The UAE and South Africa have a strong economic relation, and the UAE has become one of the main importing partners within the Gulf Cooperation Council (GCC) for South Africa sharing 38% from the region. South Africa is UAEs’ second largest trade partner in Africa with 8% of non-oil trade.
- In 2023 South Africa Imports from United Arab Emirates accounted to US$4 Billion. South Africa Exports to United Arab Emirates were $2.53 Billion. Trade between the two nations grew by 45% between 2020 and 2023. Many South African companies are benefitting from opportunities in the UAE in a variety of sectors.
- The growing trade ties between the United Arab Emirates and South Africa have resulted in the formation of the South African Business Group in the UAE with the objective of promoting business between the two countries. It has also seen the opening of offices by Dubai Chamber in South Africa and the signing of key MoUs between the UAE Federation of UAE Chambers of Commerce & Industry and key business chambers in South Africa like the Black Business Council and the SMME Chamber of Commerce.
- The cross-investment culture between South Africa and the UAE is gaining momentum and must be encouraged. The last few years have seen a growth of investment between the two nations. The UAE's investments in South Africa amount to more than $1.3 billion in 2024 and South African foreign direct investments in the UAE amounts to more than $600 million in 2024.
- This year, 2024, has seen interest by major South African companies to open business in the UAE. The UAE’s booming economy, excellent infrastructural facilities and strategic location are some of the main incentives that are attracting an increasing number of South African business people to the UAE. Tax-free income and a reliable and efficient banking system offered by the UAE further add to this attraction.
- There has been a reciprocated movement of major UAE companies into the South African market with companies like ADNOC, Infinity Energy, DP World, AMEA Power, AWS Distribution all opening business in South Africa.
- As the relationship between the two countries develops in scope and stature, plenty of opportunities are becoming available to South Africans as well as Emirati investors and entrepreneurs. The key sectors of investment interest for the UAE in South African include the following: Agriculture, Logistics, Fintech, Artificial Intelligence, Manufacturing, Renewable Energy, Digital economy, Healthcare and Education.
- Given such a positive climate, the joint efforts of the UAE and South African Governments and private sector organizations to create an ever-greater economic bond between the two countries are also advancing.
Recent Economic Developments in South Africa
- On 18 April 2023, AMEA Power signed a power purchase agreement (PPA) between Africa GreenCo Group through its southern entity, GreenCo Power Services (Pty) Limited for the 85MW PV power plant.
- In June 2023, the Embassy opened the Dubai Chamber offices in Johannesburg South Africa and has seen a rise in South African companies seeking to open business in the UAE.
- Infinity Power acquired 100% of Lekela Power’s shares for an unspecified figure, completing the biggest renewable energy deal in Africa’s history. The transaction brings the energy provider’s combined portfolio to 1.3 gigawatts (GW) across Egypt, Senegal and South Africa, with a 13.8GW pipeline in development, and makes the company the largest pure play renewable energy entity on the continent. Perdekraal East 110MW wind farm in Western Cape and 2 other wind farms in Northern Cape; Loeriesfontein 2 and Kangnas.
- In August 2023, ADNOC acquired OMV an Austrian oil and gas company that has a South African subsidiary, Borealis. OMV is active in the production and commercialisation of base chemicals and polyolefins via Borealis.
- In April 2024, DP World acquired the majority of the transport assets of BP Southern Africa (BPSA).
- On 30 April 2024, AMEA Power signed a 20-year power purchase agreement (PPA) with Eskom, the South African utility company, for the 120MW Doornhoek Solar Photovoltaic Project. This is $120 million project.
- AWS Distribution a major FMCG company in Dubai has launched in South Africa with its base being Durban.
- On 12 June 2024, by His Excellency Mahash Alhameli oversaw the signing of Memorandum of Understanding between the Federation of UAE Chambers of Commerce & Industry and the SMME Chamber of Commerce, by His Excellency Humaid bin Salem and Mr Noah Debeila the President of the SMME Chamber of Commerce.
