Economy

UAE leads exporters to Zanzibar

Exports from the United Arab Emirates (UAE) to Zanzibar surged by 29.9 per cent in July, thus surpassing Australia and India to be the largest exporter to the Islands.

The value of exports from the Emirates reached Sh48.0 billion out of Sh54.3billion in July, almost 45 per cent higher than in the previous month, boosted in part by an increase in oil prices.

According to a report of the Zanzibar Chief Government Statistician (OCGS) oil accounts for the biggest portion of the UAE’s exports to Zanzibar.

The price increase of oil, coupled with a weakened Tanzanian shilling has contributed to the now experienced high price of the energy in Zanzibar, as elsewhere in the neighbouring countries.

The total demand for petroleum products in Zanzibar is at around 10 million litres a month.

However, there is trade imbalance between the UAE and Zanzibar which has cordial relationship despite several attempts to promote trade between the two countries.

Exports from the Islands to the UAE are substantially lower. Top of the list of the exports to the UAE are cloves and seaweed.

Although investment flows into Zanzibar from the UAE have been relatively limited, the Emirates has supported several infrastructure projects in Zanzibar through grants and loans.

According to the UAE’s Ministry of Economy, the Emirates’ investment in Africa is expected to increase significantly in the coming years as the UAE continues its economic diversification efforts.

The sectors in which the UAE gives priority in the development of the continent include infrastructure, energy, mining, transport and mobile communications.

In 2018, Zanzibar signed a production sharing agreement (PSA) with the Emirates-based RAKGAS Company to pave the way for oil and gas exploration.

In November last year, Dnata a subsidiary of the sprawling Emirates Group conglomerate was awarded a $7million (about R122 million) by Zanzibar authorities to provide ground handling services at the newly built Terminal three of Abeid Amani Karume International Airport.

Zanzibar has repeatedly expressed its intention to attract more investments from the UAE in several projects, including those of the infrastructure.

Tourism and aviation links between Zanzibar and the UAE have also recently been strengthened.

“Zanzibar and the UAE have recently become close and important trading partners,” said Mohammed Said, an economic expert.

“Apart from being the major supplier of oil to Zanzibar, the UAE has emerged as a favoured destination to which Zanzibaris travel regularly to purchase household, office electronic appliances and automobile spare parts,” he added.

The UAE has the largest community of Zanzibaris than anywhere else outside East Africa.

 “Moreover, all the latest economic data indicates that the continent of Africa is the next growth area; this is because of the new-found wealth in terms of minerals, precious metals, natural gas and oil in many countries,” he added.

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