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Sharjah — An Economic Powerhouse

Manufacturing, construction and real estate drive the emirate’s economy

SHARJAH is experiencing robust economic growth after rebounding from the impacts of the Covid-19 pandemic due to thriving manufacturing, construction and real estate sectors supported by free zones and industrial parks, according to a report.

The research report by Oxford Business Group (OBG) said Sharjah stands out as a prime destination for manufacturing, services, finance, culture, and education. Its economy is nearly 96 per cent non-oil based, and the emirate hosts six specialised free zones, offering flexible investment options and advanced infrastructure.

“The emirate’s unique geostrategic location and strength in technology, healthcare, education and tourism make it well positioned for further development,” the report said.

Sharjah, a bustling city known for its rich cultural heritage, stunning architecture, and thriving economy, has become a popular destination for tourists seeking a blend of traditional Arab culture and modern amenities. The emirate's economy is diverse, with a strong focus on trade, manufacturing, and tourism. Its strategic location on the shores of the Arabian Gulf has made it a hub for trade and commerce, connecting the Middle East to the rest of the world.

The emirate is also known for its booming real estate sector, with many high-end residential and commercial properties being developed to cater to the growing population and demand for luxury accommodations.

Sharjah doesn't have a large hydrocarbon sector, so its economy is more diversified than that of most peers in the region, with a significant contribution from the cement, glass, petrochemicals, and household goods sectors, among other manufacturing industries.

"There is a need for sustainability to coexist with energy security and affordability. As such, investing in sustainable hydrocarbons while ensuring the local market receives cost-effective and dependable energy is a priority," OBG report quoted Hatem Al Mosa, CEO of Sharjah National Oil Corporation.

The government is strategically investing in sustainable development, as seen in projects like Sharjah Sustainable City, showcasing a commitment to environmental goals. The emirate’s 2023 budget emphasises economic, social and infrastructure development while strengthening financial sustainability. "Sharjah's economy is thriving, driven by a strong industrial base, a growing tourism sector, and strategic investments in key industries, says an analyst.

MODEST ECONOMIC GROWTH

In another report, S&P Global Ratings said Sharjah is likely to post modest real economic growth through 2026.

“We forecast economic growth of about two per cent on average over 2023-26. Sharjah's economy is more diversified than that of other sovereigns in the Gulf Cooperation Council region and is expected to post 2.5 per cent GDP growth this year,” according to the S&P report.

The rating agency affirmed its 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings on the Emirate of Sharjah with stable outlook. At the same time, S&P maintained its 'AA+' transfer and convertibility assessment on Sharjah.

FREE ZONES CONTRIBUTION

Sharjah is home to several industrial zones and free trade zones, attracting businesses from around the globe looking to establish a presence in the region. The emirate's free zones make a substantial contribution to the economy as it has about 5,000 companies operating in each of its two largest zones — Hamriyah Free Zone Authority and Sharjah Airport International Free Zone.

The emirate also has more than 12,000 — mainly smaller companies, at Sharjah Media City (Shams). Foreign companies in free zones can be 100 per cent foreign owned, and they can import into, or export out of, the zones without imposed import duties, taxes, or currency restrictions, alongside the option to repatriate 100 per cent of capital and profits.

FAMILY TOURISM DESTINATION

Sharjah, which aims to become a top regional family tourism destination, is expanding its infrastructure, including Sharjah International Airport. The emirate is progressing towards a sustainable and diversified economy, harmonising economic resilience with cultural richness.

"To maximise the benefits of its location, Sharjah has been continually enhancing standards to meet the diverse requirements of travellers and airlines from different regions. This presents key opportunities for airports and airlines to cater to varied needs," said Ali Salim Al Midfa, Chairman, Sharjah Airport Authority.

Aligned with the UAE’s tourism strategy, Sharjah anticipates sustained growth in the broader GCC tourism market. The Sharjah Commerce and Tourism Development Authority targets a 50 per cent increase in hotel rooms by 2025, enhancing investment opportunities. UNESCO World Heritage sites in Sharjah drive growth and employment, making it appealing for tourists and investors alike.

Khalid Jasim al Midfa, Chairman, Sharjah Commerce and Tourism Development Authority, said emerging markets possess a unique opportunity to integrate sustainable practices into their tourism offerings from the ground up.

“In Sharjah, we have developed protected areas and wildlife centres, preserved biodiversity and offered distinctive visitor experiences," he said.

Sharjah’s financial services sector features prominent banks and a thriving insurance industry. The financial technology space is also advancing, propelled by national strategies promoting digital finance and Sharjah’s commitment to innovation. The sector is subject to Emiratisation policies, with an aim for the sector’s workforce to include 45 per cent Emirati nationals by 2026. "Banks in the emirate play a crucial role in providing financial services, capital and investment opportunities to businesses and individuals. They support economic growth by providing loans, facilitating trade, and promoting saving and investment among individuals," said Mohamed Khadiri, CEO, Bank of Sharjah.

ENERGY, GREEN ECONOMY

Sharjah is playing a crucial role in the UAE’s drive to achieve net-zero carbon emissions by 2050, leveraging its strategic location. The emirate is emphasising carbon capture and storage, renewable energy sources, waste-to-energy initiatives, and sustainable finance to support its green programmes.

"The emirate’s focus on innovation, technological advancement and the development of a skilled workforce enhances its appeal to global investors. A commitment to sustainable and green initiatives aligns with the growing investor preference for environmentally conscious and future-forward opportunities," said Mohamed Al Musharrkh, CEO, Sharjah FDI Office (Invest in Sharjah).

The energy transition in Sharjah aligns with the UAE Energy Strategy 2050. This framework focuses on creating jobs, attracting investment and increasing the share of clean energy sources to 32 per cent by 2030. The strategy aims to reduce consumption, addressing water scarcity challenges in the country.

— muzaffarrizvi@khaleejtimes.com