In a significant development for bilateral economic relations, the United Arab Emirates and the Central African Republic have signed a Comprehensive Economic Partnership Agreement (CEPA) that is projected to boost trade between the two nations to over AED3.67 billion in the next five to seven years. Announced on March 7, 2025, by Dr. Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade, the agreement underscores the UAE leadership’s commitment to diversifying trade, enhancing investment cooperation, and fostering sustainable development both regionally and globally.

A New Era of Bilateral Trade

Non-oil trade between the UAE and the Central African Republic has been on a steady rise, with figures reaching over AED925 million in 2024. This growth reflects not only the increasing commercial exchanges between the two nations but also the broader strategic shift of the UAE toward diversifying its economy beyond oil revenues. The new CEPA is designed to build on this momentum by eliminating trade barriers and creating a robust framework for future economic collaboration.

Dr. Thani bin Ahmed Al Zeyoudi explained that the CEPA embodies the UAE’s strategic economic priorities—economic diversification and sustainable development. “This agreement will create further growth and prosperity opportunities for business communities in both countries,” he said in his statement to Emirates News Agency (WAM). “It is a clear demonstration of our commitment to enhancing trade and investment cooperation globally, while supporting the UAE’s economic strategy.”

Key Features of the Agreement

The CEPA establishes an ambitious framework for trade liberalisation and investment between the UAE and the Central African Republic. One of its standout features is the significant tariff removal that has been agreed upon by both parties. The UAE will grant a 98 percent tariff removal for goods originating from the Central African Republic, while the Central African Republic will extend an even higher 99.5 percent tariff removal for UAE exports. This substantial easing of tariff barriers is expected to open up the UAE market for Central African products and vice versa, providing a major boost to bilateral trade.

Liberalisation and Market Access

The extensive tariff removals ensure that a wide range of products will benefit from duty-free access, paving the way for increased exports in several key sectors. For the UAE, this means that its diverse range of high-quality manufactured goods, technology products, and advanced services can enter the Central African market with minimal cost. Conversely, the Central African Republic’s exports, which include raw materials and agricultural products, will find a more receptive market in the UAE.

Investment Opportunities Across Multiple Sectors

Beyond trade liberalisation, the CEPA outlines significant investment opportunities for both nations across various sectors. The agreement is set to enhance cooperation in:

• Telecommunications: Strengthening digital infrastructure and expanding connectivity.
• Hospitality and Tourism: Capitalising on the UAE’s robust tourism industry to promote investment in hospitality projects in the Central African Republic.
• Logistics: Improving supply chain management and transportation networks to facilitate smoother trade flows.
• Financial Technology: Advancing fintech innovations that can support a broader range of digital financial services.
• Traditional Industries: Including aluminium, ceramics, petrochemicals, iron, silver, and gold—sectors in which both nations have competitive advantages.
• Food Products and Textiles: Promoting the exchange of high-quality agricultural produce and textiles.

The agreement also emphasizes cooperation in emerging sectors such as the digital economy and advanced technology. This focus on future economic sectors is designed to help both nations capitalize on technological advancements and create an environment where small and medium enterprises (SMEs) can flourish.

Strategic Implications for the UAE

For the UAE, this CEPA comes at a crucial time. The country has been actively working to diversify its economy away from a heavy reliance on oil revenues—a goal enshrined in various strategic initiatives such as UAE Vision 2021 and subsequent long-term economic plans. By forging deeper trade and investment links with emerging markets like the Central African Republic, the UAE is not only expanding its global trade network but also positioning itself as a key hub for economic activity in Africa.

Economic Diversification and Global Trade Network

The UAE’s efforts to diversify its economy have been underscored by its commitment to establishing strong trade ties with regions outside its traditional sphere of influence. The new CEPA is expected to significantly contribute to the growth of non-oil trade, which is a critical component of the UAE’s broader economic strategy. With global markets increasingly favouring diversification and resilience, the agreement provides Emirati businesses with new avenues to expand into the African market—a region that is poised for rapid economic growth.

Enhancing Competitiveness and Innovation

In addition to expanding trade, the CEPA offers extensive opportunities for technological and industrial collaboration. By facilitating the flow of goods and services between the UAE and the Central African Republic, the agreement is expected to spur innovation in both countries. For example, enhanced investment in digital technologies and the digital economy can lead to improved efficiencies in supply chains, reduced operational costs, and better integration of global markets.

Opportunities for the Central African Republic

For the Central African Republic, the agreement is a milestone that has the potential to transform its economic landscape. Historically, the country has faced numerous challenges, including limited infrastructure, low industrial output, and a reliance on a narrow range of exports. The CEPA presents an opportunity to diversify its economy and attract much-needed investment in strategic sectors.

Boosting Non-Oil Trade and Industrial Growth

The Central African Republic’s non-oil trade has been growing steadily, and the new agreement is expected to accelerate this trend. With near-total tariff removal on exports to the UAE, local businesses can now compete more effectively in a lucrative market. This could lead to increased production of commodities such as agricultural products, minerals, and textiles, which are among the country’s traditional exports.

Attracting Foreign Direct Investment (FDI)

In addition to boosting trade, the CEPA is poised to attract substantial foreign direct investment. The agreement outlines numerous investment opportunities in key sectors such as telecommunications, hospitality, and logistics. These investments are expected to bring modern technologies, enhance industrial capabilities, and create job opportunities. Such developments could help stimulate broader economic growth in the Central African Republic and improve the standard of living for its citizens.

Strengthening Institutional Frameworks

The partnership also aims to strengthen the institutional and regulatory frameworks in the Central African Republic. By aligning its trade policies more closely with international best practices, the country can enhance its competitiveness and attract further investments. This institutional strengthening is critical for sustaining long-term economic growth and for building a resilient economic environment that can withstand global market fluctuations.

Regional and Global Impact

The UAE-Central African Republic CEPA is not just a bilateral arrangement; it also has broader regional and global implications. In a world where supply chain resilience and economic diversification are becoming increasingly important, such agreements are vital for integrating emerging markets into the global economy.

Catalysing Regional Trade

One of the expected outcomes of the CEPA is the catalysation of regional trade within Africa. As the Central African Republic strengthens its trade links with the UAE, other African nations may be encouraged to pursue similar agreements. This could lead to a more integrated African market, with enhanced cross-border trade, improved logistics, and greater overall economic stability. The long-term benefits could include increased intra-regional investment and a more robust trading bloc that is better positioned to negotiate on the global stage.

Enhancing Global Supply Chains

For the UAE, expanding its trade network into Central Africa strengthens its position as a global logistics and trading hub. The agreement is expected to improve supply chain efficiencies by creating direct trade routes and reducing transit times. As businesses increasingly seek to diversify their supply chains to mitigate risks associated with geopolitical uncertainties and disruptions, the UAE’s enhanced connectivity with Central Africa could become a strategic asset.

Strengthening South-South Cooperation

The CEPA also exemplifies the growing trend of South-South cooperation, where developing and emerging economies forge partnerships that support mutual growth. Such collaborations are particularly important in a global environment where traditional power dynamics are shifting, and emerging markets are becoming key drivers of global economic activity. By working together, the UAE and the Central African Republic can leverage their respective strengths—advanced technology and diversified economy from the UAE, and abundant natural resources and emerging markets from Central Africa—to create a win-win scenario.

Digital Economy and Advanced Technology: The Future of Trade

A notable aspect of the agreement is its focus on advancing collaboration in future economic sectors, particularly the digital economy and advanced technology. As global trade becomes increasingly digitised, the integration of digital platforms into trade processes is essential for enhancing efficiency, transparency, and competitiveness.

Opportunities for SMEs

The agreement is expected to open new avenues for small and medium enterprises (SMEs) in both countries. By reducing trade barriers and facilitating easier market access, SMEs will be better positioned to innovate and compete internationally. The digital economy focus is likely to drive the adoption of e-commerce platforms, fintech solutions, and other digital tools that can help SMEs streamline operations, reach new customers, and reduce costs.

Leveraging Advanced Technologies

Both the UAE and the Central African Republic stand to benefit from collaboration in advanced technologies such as blockchain, artificial intelligence (AI), and the Internet of Things (IoT). These technologies have the potential to revolutionize supply chain management, financial transactions, and logistics operations. For instance, blockchain can provide secure, transparent records of trade transactions, reducing the risk of fraud and enhancing trust between trading partners. Similarly, AI-driven analytics can help businesses forecast demand, optimize inventory, and improve overall operational efficiency.

Building a Future-Ready Workforce

The digital transformation spurred by the agreement will also necessitate the development of a skilled workforce capable of harnessing these advanced technologies. Both nations may see increased investments in education, vocational training, and technology incubators to support this transition. This, in turn, can lead to job creation and enhanced human capital, which are essential for sustaining long-term economic growth.

Challenges and Considerations

While the CEPA promises substantial benefits, both nations will need to address several challenges to fully realize its potential. Key among these is the need to ensure that regulatory frameworks are updated to support the new trade and investment dynamics. Both countries will also have to invest in upgrading their infrastructure—such as ports, logistics networks, and digital connectivity—to handle increased trade volumes efficiently.

Moreover, while tariff removals and liberalisation measures can stimulate trade, they may also expose domestic industries to heightened competition. Careful policy design will be required to ensure that local businesses can compete effectively without being overwhelmed by larger international players. This may involve the implementation of supportive measures such as capacity-building programmes, access to financing, and targeted subsidies for critical sectors.

The Road Ahead: Strategic Vision and Long-Term Benefits

The UAE-Central African Republic CEPA is a forward-looking agreement that not only seeks to boost trade figures in the near term but also lays the foundation for sustainable, long-term economic growth. By focusing on economic diversification, digital transformation, and strategic partnerships, the agreement is poised to create a more integrated and resilient economic ecosystem.

For the UAE, this partnership is an important part of its broader strategy to expand its global trade network and reduce reliance on oil revenues. It represents a continued commitment to fostering mutually beneficial relationships with emerging markets, thereby securing new growth opportunities in an increasingly competitive global landscape.

For the Central African Republic, the agreement could be transformative. Beyond the immediate boost to non-oil trade, it offers a pathway to modernise its economy, attract foreign direct investment, and build the institutional capacity needed to participate fully in the global economy. The potential spillover effects—such as improved infrastructure, job creation, and enhanced technological capabilities—could significantly elevate the country’s economic profile and provide a model for other nations in the region.

Conclusion

The signing of the UAE-Central African Republic Comprehensive Economic Partnership Agreement marks a pivotal moment in the evolution of bilateral trade and investment between the two nations. With ambitious targets set to boost trade beyond AED3.67 billion and extensive provisions for tariff removal and market liberalisation, the agreement represents a bold step toward economic integration and diversification. It opens up vast opportunities for businesses—from large multinational corporations to nimble SMEs—across a wide array of sectors including telecommunications, hospitality, logistics, advanced technology, and traditional industries such as aluminium and textiles.

As the UAE continues its strategic drive to diversify its economy and extend its global trade reach, and as the Central African Republic seeks to modernise its economic framework and harness its natural and human resources, this partnership promises to be a catalyst for significant growth and development. With both countries committed to a future of enhanced cooperation, innovation, and mutual prosperity, the CEPA is set to redefine trade relations in the region and establish a new benchmark for South-South economic collaboration.

In an era marked by rapid digital transformation and shifting global economic paradigms, the UAE-Central African Republic agreement stands as a testament to the power of strategic partnerships. It underscores the importance of economic diversification, technological advancement, and integrated investment in building resilient and competitive economies. As the implementation of the agreement unfolds over the coming years, both nations are poised to reap substantial economic and social benefits, creating a win-win scenario that could serve as an inspiration for similar initiatives across the globe.

Ultimately, the CEPA is more than just a trade agreement—it is a strategic vision for the future, one that leverages the strengths of two diverse economies to create a dynamic and mutually beneficial partnership. With the groundwork now laid for enhanced trade, investment, and technological cooperation, the road ahead appears promising, offering a blueprint for how emerging economies can collaborate to overcome challenges and drive sustainable growth in an interconnected world.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

7th March, 2025