Turkish Companies in Africa

The Turkish PM Recep Erdogan and his family made a dramatic trip to the war torn Somali capital Mogadishu earlier this year. Only the bravest or most foolhardy pilots will risk landing at the city’s airport, which is often at the mercy of trigger happy militia groups who fight over the city. The visit was officially to lend his support for the Organisation of Islamic Co-Operation efforts to aid the famine in the region, but the trip has also underlined Turkey’s new commitment to Africa, which has now gone beyond its usual backyard of North Africa to the rest of the continent. With Egypt in political disarray Turkey has been able to reach out and take a leadership role by recognising the new governments of the region in Tunisia and Libya, and keeping a foreign policy largely independent of the US. The Turkish Government has spearheaded diplomatic efforts, opening new embassies in countries across the South and West of Africa, in countries such as Gabon and Senegal which until recently had no connections with the country.  Following in wake of the diplomatic efforts the national carrier Turkish airlines now have 25 direct routes to African cities. Turkish business councils have been quickly established in the larger African economies.

I first became aware of the prevalence of Turkish companies talking to director of a political consultancy firm at a conference about North Africa, who vividly described their expansion across the continent.  Discussions with Turkey experts and further research revealed how Turkey’s economic success story is leading the country’s firms to rapidly expand overseas, to both North Africa and to Sub-Saharan regions. For example the construction company Kolin Insaat beat off competition from 23 other international bidders in Uganda to upgrade a road from Hoima to Tonya. The project is the kind of big infrastructure you might expect a Chinese company to be completing, while increasing foreign investment and trade with the giants of India and Brazil has been noted by analysts and observers, Turkish firms have slipped in under the radar. Another area where Turkish companies have experience is in building shopping malls. Turkish firms have had considerable success in building malls abroad in Central Asia, such as the spectacular  Khan – Shatyr  a striking traditional Kazakh tent shaped structure in the new capital of Astana, the building was designed by Richard Rogers and built by Sembol Insaat. The capital is full of amazing buildings, an architect’s playground, but the building still stands out because of its unique and striking design. Sembol Insaat  ha gained experience building projects in Central Asia and the Middle East and has now moved onto building projects in Libya.

Ayka Textile Group textile group is a Turkish company who has rapidly grown its export market in the Middle East and Europe expansion into Africa, the Istanbul based concern employs around 2000, a large company but by no means a giant. The textile sector has traditionally been a strong industry for Turkey with low costs and proximity to Europe allowing it to successfully supply clothes to the continent, the Company set up a subsidiary factory in Ethiopia allowing it to reduce costs further while maintaining control over production.

One major setback has been the Libyan revolution, a country in which Turkey invested heavily, and for which plans for Africa’s largest shopping mall have been made. There is obvious uncertainty with the state of the country at present, but the indications are that the new government are likely to opt for a more open form of economy, and given Ankara’s early recognition of the National Transitional Council, a new economic order could open the door for more opportunities. But a more open economy could also intensify competition from other countries previously frightened off by the Gadhafi regime.

Turkish African trade topped $15 billion in 2010, still a long way off China & the US, but a considerable increase, tripling over the last decade. Turkey’s relations with Africa are likely to be among the most dynamic of all external powers engaging with the continent, as its relations are rapidly developing in Sub Saharan Africa and as the political scene changes in North Africa in wake of the Arab Spring. Turkey’s move towards Africa also reflects its desire to engage with developing countries as EU accession looks further away than ever.



Categories: Kula Ring Trade Blog

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