Dubai Financial Hub Eyes ‘Astronomical’ Growth in Africa, AsiaAlaa Shahine
Dubai International Financial Centre, the tax-free business park, is relying on economic growth prospects in Africa and South Asia as it adds buildings with a value of 15 billion dirhams ($4.1 billion) over a decade.
DIFC, whose clients include global banks such as Goldman Sachs Group Inc., is seeing a surge in demand from Asian companies and from clients who are using Dubai as a platform to expand into Africa, Chief Executive Officer Jeffrey Singer said. Dubai is home to one of the world’s busiest airports and owns Emirates Airlines, which flies to more than 120 destinations.
“Dubai is perfectly poised to take advantage of what’s going to be an astronomical growth” rate in the two regions over the next decade, Singer said in an interview in Washington. “We will grow along with that.”
The DIFC opened in 2004 to attract international banks, asset managers and insurers with promises of a zero-tax environment. The center will seek property companies, developers, funds and real estate investment trusts to develop 17 buildings through joint ventures, DIFC Properties CEO Brett Schafer said on Oct. 8.
Economic growth in sub-Saharan Africa will accelerate to 6 percent in 2014, three times faster than the world’s advanced economies, from 5 percent this year, according to International Monetary Fund projections. Asia’s developing economies will expand 6.5 percent, the IMF estimates.
Chinese and Indian companies are filling the gap left by retreating investment banks in Dubai, Singer said “We have four of the top Chinese banks,” he said. “‘The top 20 banks from India, in DIFC. State Bank of India, the largest, DIFC. Why? Ask them: Africa!”
Dubai, the second-biggest sheikhdom in the United Arab Emirates, borrowed more than $100 billion transforming itself into the Middle East’s main financial, trade and tourism hub before teetering on the brink of default in 2009. The emirate’s economy has since recovered, growing 4.4 percent in 2012, the fastest pace in five years.