Middle-East and Africa Regional Insights

The Middle-East and Africa region comprises two distinct sub regions – Middle East and North Africa (MENA), and Sub Saharan Africa. Pre-pandemic, the World Bank and IMF had predicted 3-4% economic growth in the sub regions in 2019-2021. But with the onset of COVID, only certain economies in MENA are expected to rebound this year compared to the rest of the region, due to benefits from higher crude prices, reduction of OPEC+ cuts, and vaccine rollout.

Normalization of political and economic ties between Israel and the United Arab Emirates (UAE) was looked to bring about stabilization in the Arab world. However, continuing geopolitical tensions, weakening fiscal outlooks, and uncertainty around the pandemic are presenting trade challenges across the MEA region.

Austrade has presence in the following key markets through offices and trade representatives that support the wider region in identifying significant opportunities for Australian businesses across priority sectors:

  • MENA: UAE, Saudi Arabia, Morocco, and soon to open an office in Qatar
  • Sub-Sahara: Ghana, Nigeria, South Africa, Kenya
  • Other: Pakistan

Australia’s highest ranking partners in terms of total merchandise exports are the UAE (#17), South Africa (#25) and Saudi Arabia (#26).
Austrade, along with a widespread Department of Foreign Affairs and Trade (DFAT) network, and state governments, works closely with allies and partners, such as the Australian industry associations, business councils, and chambers of commerce and industry, to provide robust support to Australian businesses coming to the market.

Regional focus lies in maintaining and growing market share in strategic sectors of food and agribusinesseducationmining and resourcesdefence and spacehealthcareinfrastructure, and digital technologies.

Leading the way

Australia is seen as a source for premium, whole and organic food with product traceability and clean label ingredients.

Australia’s agriculture and food exports to the Gulf Cooperation Council (GCC) nations were over AUD$2.8 billion in 2020. UAE, and Saudi Arabia ranked in the top 20 trading partners in this category, and ranked in the top five international markets for Australian fresh vegetables in 2020.

Australia’s third largest sheep meat destination is the UAE, and it has been a key supplier to the Middle East and North Africa region for over 50 years. As of recently, Australian Wagyu found a new market in Kenya after demand for premium Australian meat increased following a series of food roadshows organised by Austrade in 2017 and 2018.

Opportunity in diversity
MEA markets are the fifth largest regional group with 49,189 student enrolments in 2020 (covering North Africa, Middle East, Sub-Saharan Africa and Pakistan). This is around 5-6% of total international student enrolments.

There is considerable diversity across the region, and with Covid-19, new and emerging trends are focused on innovation and digital agenda to drive economic growth. Additionally, a significantly young population is seeking quality education engagement.

Australia has a strong transnational footprint with higher education and TAFE providers active in MEA markets (UAE, Saudi Arabia, Kuwait, and Mauritius). These educational institutions are not only targeting students from the broader MEA region, but have also appealed to learners from the Indian sub-continent, looking to study closer to home.

The pandemic has been a ‘reset’ for education across MEA. Digital and new ways of learning are here to stay in different formats providing opportunities for Australian EdTech sector.

Significant footprint in Africa
According to Global Data, Africa has over 132 ASX-listed mining companies, operating 458 mines across 34 countries on the continent. At the start of 2020, there were up to 170 Australian METS companies in operation; with a larger proportion of them operating across the southern and western part of the continent.

In the Middle East, Saudi Arabia plans to spend more than USD $7.4 billion exploring for metals and minerals by 2035. This is part of a USD $426 billion infrastructure spending plan that seeks to exploit what could be USD $1.3 trillion in resources.
Also, large untapped resource potential in Turkey exists with 50 different minerals and metals in economically viable quantities (the largest gold producer in Europe). At least 40% of Turkey’s prospective area is not yet explored.

Untapped market potential
The Gulf Cooperation Council (GCC) healthcare market is set to cross USD $30 billion in 2021.

Healthcare is one of the most important service sectors in the UAE. In 2019, total healthcare expenditure in UAE totalled USD $1.3 billion (comprised 7% of federal budget). And building a new healthcare infrastructure and digitisation of services are a priority for Saudi Arabia under the Saudi 2030 Vision.

Australian healthcare providers active in the region include Aspen, Cochlear, TAHPI, and Synapse.
The other key sectors such as, defence and space, infrastructure, and digital technologies, are seeing significant opportunities mainly in UAE, Saudi Arabia, South Africa (Space), and Kenya (digital technologies).

In terms of investment, the Gulf States have 4 of the 10 largest Sovereign Wealth Funds (SWFs) in the world. Of the six GCC countries, the highest total foreign investment in Australia was by Kuwait at AUD $13.3 billion, followed by the UAE at AUD $12 billion in 2019.
Complementing DFAT’s efforts at Expo 2020 Dubai, Austrade will support the Australian Pavilion activities by scheduling programs around major commercial exhibitions that are taking place in the region, such as Gulfood, Arab Health, Big 5, Mining Indaba, etc.
The pandemic has shown exporters the importance of diversifying and looking beyond traditional trade markets, and the MEA region even though a bit challenging, offers plenty of scope for Australian companies to expand their international presence.

We are keen to support you in-market, and provide further insights if you are looking at doing business in the region.

Connect with us at www.austrade.gov.au

United Arab Emirates – Looking beyond oil

The UAE is well known for its modern infrastructure, international events and status as a trade and transport hub. It’s political and economic stability, and fast-growing capital markets, contribute to its attractiveness as both a place to invest and to operate businesses with a regional focus. It has the most diversified economy in the Gulf, but Covid-19 has had a significant impact on the non-oil sectors of transport, tourism, hospitality, real estate and retail, on the back of a shock to the economy from the drop in global oil prices.

High levels of PCR testing have been key to the UAE’s Covid-19 management strategy and are closely tied to vaccination levels. In a population of 10 million people the UAE has now administered over 12 million vaccine doses and conducted more than 47 million tests.

The UAE’s long-term economic strategy is centred on diversification away from oil. This includes a focus on tourism, real estate, retail, financial services, the provision of high standard medical care, and reinforcing its already leading role as a global logistics hub for shipping and airlines.

The UAE is also focused on increasing its reputation as a regional hub and business-friendly country. Examples of recent initiatives include the new “golden visa” which encourages expatriates to stay in the country long-term, including into retirement, more favourable rules for ownership by foreign companies which means foreigners of any nationality for the first time can now own 100 per cent of their business in the country outside of free zones, and a new “remote work visa” that enables employees from all over the world to live and work remotely from the UAE, even if their companies are based in another country.
The Abu Dhabi Investment Office and Dubai’s investment office ‘Dubai FDI’ are providing various support packages to foreign companies looking to establish or expand in the UAE.

The sectors that offered the best opportunities in recent times for Australian capabilities are agrifood, health, defence, education, and niche capabilities in infrastructure. There are opportunities for companies across all sectors that offer solutions that save money and create efficiencies, particularly around automation and digitisation. The UAE is increasingly examining, including artificial intelligence, for example to scan medical images, and data analytics that allow executives to see where money and resources are being spent, digitisation of records and reporting tools, and precision medicine (looking at genes and customising treatment to be more effective). These areas may also provide opportunities for Australian companies.

The UAE will host World Expo in Dubai from October 2021 to March 2022. The Australian pavilion will provide a platform to showcase Australian ingenuity and innovation, and an opportunity to pursue trade and investment opportunities via a targeted business program in sync with Expo 2020 Dubai themes for: Food&Agribusiness, Healthcare, Infrastructure, Resources&Mining, Advanced Manufacturing, Renewables&Energy, Digital Tech and Education. The UAE’s organising committee has recently announced a hybrid delivery of in-person and virtual events in order to reach a larger international audience.The focus of participating nations is now trade and investment opportunities as part of their COVID-19 economic recovery strategies. Australia will leverage this event to support market diversification strategies for Australian industry and exporters, by delivering ‘B2B’ and ‘B2G’ activities at major commercial exhibitions occurring around Expo 2020 Dubai.For more information in relation to Expo 2020 Dubai and opportunities to participate, please email: Expo2020@austrade.gov.au

Saudi Arabia: Vision and opportunity

Significant opportunity exists for Australian businesspeople in Saudi Arabia, as it undergoes extensive economic and social transformation under its “Vision 2030” diversification plan.

Vision 2030, which aims to diversify the economy away from oil, requires large injections of foreign investment, knowledge transfer and skilled professionals. Accordingly, the Saudi market holds an abundance of opportunity for Australian exporters, especially in the infrastructure, mining, agrifood and education sectors. Our two-way goods and services trade in 2019-20 was nearly AU$1.9 billion, with strong potential for future growth.

Economy and business environment

Despite global uncertainty related to Covid-19, the Saudi economy and business environment are expected to progressively improve in 2021. The IMF projects the Saudi economy will grow by 2.1 per cent in 2021.
Reforms to contract, business and labour laws, the banking system and the Saudi capital markets in recent years have made it much easier to do business. Saudi government agencies are focused on improving regulatory frameworks to encourage trade and investment. Incentive programs exist in key sectors, including for foreign companies who establish a regional headquarters in Saudi Arabia.
Perceptions about Saudi Arabia are often dated and misleading. Reforms have made Saudi Arabia more attractive to businesspeople. These include introducing visit and residency visas, relaxing dress codes, introducing an array of entertainment options, allowing gender-mixing at a number of tourist sites and in restaurants, and opening new sectors for female employment. Australian consultants – both male and female – are afforded the opportunity to do business at a senior level with significant responsibilities, and consider that experience in Saudi Arabia would be valuable in future careers.


Mining, Infrastructure and Professional Services
FDI in Saudi Arabia has continued on an upwards trend, with projects associated with Vision 2030 continuing apace despite the pandemic. Saudi Arabia’s leadership wants to invest the country’s oil wealth to develop the manufacturing industry, including down-stream oil and gas, renewable energies, automotives and downstream extractives processing. The leadership has announced an infrastructure investment pipeline valued at USD 1.2 trillion.

There is strong medium to long term potential for Australian services to play a role in the realisation of Vision 2030 projects to transform the Saudi economy in infrastructure, digital systems and resources. Australian companies are currently providing consultancy work in key positions on a number of the ‘Gigaprojects’ associated with Vision 2030 – including ‘smart city’ Neom, tourism developments Amaala and the Red Sea project, and entertainment zone Qiddiya. Australian companies are being solicited by Saudi Government agencies seeking digital technology capabilities for e-government and the finance sector. Although we already have a number of Australian experts and services companies supporting the extractive sectors with the Saudi Arabian Mining Company (Ma’aden), the industry is set to grow rapidly in the coming years with new projects and will offer new opportunities.

Australian food products, especially meat, dairy and vegetables, have built up a strong reputation in the Saudi market. As Saudi Arabia develops its hospitality sectors, Australian products including high quality beef and lamb, have gained a foothold in this premium market.
Most recently Australia has become the largest supplier of barley to Saudi Arabia – demonstrating the importance of Saudi Arabia as a diversification market for Australian commodity exporters.

Major Saudi sovereign wealth funds are increasing their international investments. Aramco is interested in gas investments in Australia, and SALIC has invested in Australian agricultural land and is exploring further investment options. Major sovereign wealth funds are also sharpening the focus on domestic investment to build capacity in key sectors, such as health, agriculture and mining.

The significant and motivated cohort of Saudi students studying in Australian higher education institutions has become the bedrock of our growing education ties. While border closures have necessitated a change in approach, with a greater focus on online and transnational education, Australian institutions are building ties with Saudi government and private sector entities to deliver high quality Australian education services.
Strong opportunity exists for Australian providers in the vocational education and training sector in Saudi Arabia to complement the investments that Australian providers have already made in the Kingdom, such as Aviation Australia College in Riyadh. Long-term investment in university education has resulted in a youthful generation of well-educated Saudis looking for professional roles, however there is a lack of trades and technical workers. Over 2 million foreign tradespeople and labourers have left Saudi Arabia since 2017, and maintaining productivity without them is a challenge for the country, which is also trying to encourage Saudis into semi-skilled jobs.

Australian Business Networks and Further Information

Useful contacts in Australia include:
Australia Saudi Business Council

Australian Arab Chamber of Commerce and Industry

There is an active Australian business and social community in Saudi Arabia, including the Australian Business Group Saudi Arabia who meet regularly outside of the summer month holiday period (and of course Covid-19 restrictions). You can register for ABGSA via Facebook or LinkedIn.
Austrade has published further information on the Saudi market, including contact details for its Riyadh office. The Australian Government regularly updates the travel advisory to Saudi Arabia.