An aerial view of Dubai City. The city offers unique opportunities for
doing business with Kenya, especially on foods and commodities. PHOTO |
FILE
By JAMES MWANGI
The success of Dubai as a modern city has endeared it
to the world as the Middle East regional commercial hub, bringing
together business players from all corners of the world; the East, the
West, the South and the North.
This international exposure has pushed Dubai to quickly
integrate into global value chains quickly. The setting up of sector
specific eco-systems – including the Dubai International Financial
Centre, Dubai Multi Commodities Centre, Dubai Internet City, Dubai Media
City, Dubai International Academic City, Dubai Airport Free Zone, the
Jebel Ali Port Free Zone and having one of the world’s busiest seaports
and airports – has largely contributed to the growth of the global
commercial hub.
These focused economic eco-systems have pulled most
major global players including banks and financial institutions, IT
companies like Google and Cisco, media players like Reuters and CNN,
universities like Hult and Murdoch and shipping and logistics giants
like Maersk, P&O and Agility.
The rise of Burj Khalifa and similar neo-modern
icons such as the Dubai Mall, the Burj Al Arab, the bidding and winning
of the World Expo 2020, among others, have further propelled Dubai into
the limelight.
How can Kenya and East Africa benefit from
proximity to this Middle East city-state while taking advantage of
shared history, language, heritages and the rapid opening up of the
world through technology? How can Kenya integrate quickly and deeply
into global value chains through Dubai?
Global value chains make it possible to bring
together all the raw materials and components that combine to make a
product or service, to deliver it into use, to support users and to
recover and integrate residue into a waste stream.
Global value chains span the world so that even
mundane items now commonly involve the coordination of flows of goods,
information, finance and people across several continents.
A global value chain may involve exporters of
avocados from rural Kenya, Indian importers based in Dubai and Arab and
European consumers across the Middle East.
Much of today’s international trade is shrouded in
high requirements for standards and compliance. For example, exporting
fruits, vegetables and flowers into Europe requires high compliance to
chemical use and rules of traceability. Compliance globally is a real
barrier to trade and imposes high costs, especially on small and
medium-sized businesses.
Dubai is not as rigid as Western countries
regarding rules of importation and, therefore, can be a soft landing for
Kenyan goods to enter the fray of international trade and global flows.
Exporters from Kenya, especially for fruits and
vegetables, have been known to prefer exporting to Dubai because of
relatively relaxed rules.
There are unique opportunities for doing business with Dubai and the rest of Middle East, especially for foods and commodities.
In principle, since the Middle East lies in a
desert, any business built on the premise of bridging the natural
disadvantages of a desert with the abundance of a resource-rich Africa
finds solid ground to thrive.
The higher than average per capita incomes combined
with the challenges of food storage in hot weather conditions, and the
growing inter-connectivity of Dubai to the region and the world, ensure
that the city is constantly in a cycle of food consumption and
importation to meet growing demand both for its growing population and
for re-exportation.
It is no wonder there are many exporters of foods
from Kenya into the United Arab Emirates. The proportion of Kenyan
exports into Dubai, however, fades in the light of overall imports into
the country and the region.
This calls for Kenyan businesses to expand the scope
of export products and to explore opportunities of other products that
carry lesser risks and have better returns.This is possible as the geographical distance between East
Africa and Dubai is far much shorter than other regions like the
Americas or Far East.
For Kenyan businesses to thrive in international
trade, it calls for a mind shift in the way we engage contractually so
as to raise our standards to beyond what is acceptable for international
business.
We have unfortunately gained the reputation of
over-promising and under-performing where contractual deliveries are
concerned. We often fall below standards where quality is concerned as
well as fail to deliver on time.
Prudence on whether one can perform a contract or
not before signing or agreeing to a contract will save the exporter and
importer time and money and may even further deepen a mutually
beneficial business relationship.
Most people in the Middle East and from the Arab culture highly regard honesty and truthfulness, even in business transactions.
Most importantly, however, remember to do proper
costing for your business to ensure that you are profitable at all
times. Understand, for example, what CIF or FOB price means as this
directly impacts your profits.
Mr Mwangi is the managing director, Affronta, Dubai Multi Commodities Centr
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