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Turkey Favours Joint Ventures In Africa

Turkey Favours Joint Ventures In Africa

One important facet of Turkey’s interest in both North and sub-Saharan Africa is Ankara’s ambition of encouraging manufacturing and industrial joint ventures in Africa. Turkey is a genuine emerging market in that it has developed out of a dependency on agricultural exports and now has a burgeoning manufacturing sector. Turkish government research has also identified agriculture, energy, mining and tourism as being among the most attractive investment options in Africa.

Speaking at the 7th Turkey-Africa Trade Bridge in December, the vice president of the Turkish Confederation of Businessmen and Industrialists (Tuskon), Ahmet Ciger, said that trade between Turkey and Africa was on the verge of taking off.

A total of 600 Turkish business representatives met 350 African counterparts at the event to discuss joint ventures. Ciger said: “There is potential for, particularly, construction and infrastructure investments in Africa for Turkish firms. In addition to these sectors, we have to attract Turkish investments to such promising fields as automotive, food, furniture and home textiles in Africa.”

Some Turkish firms are already setting up their own operations in Africa, often in partnership with local companies. Turkey’s Latek Logistics is now an active participant in the East African logistics sector through its Latek Group East Africa subsidiary. Chairman Levent Erdoğan said: “The group proposes to set up a container freight station in the country and others regionally. Towards this end, $60m has been initially earmarked to cover the development cost of the facilities. We have chosen Kenya to be the natural hub and launch pad for our operations due to the country’s physical and trade connectivity.”

Another $40m will be invested by Latek in the rest of the region, while Turkish company, LTK Homes, is setting up a joint venture in Kenya to import Turkish construction materials.

Car plants in Nigeria

Turkish Airlines (THY) expects to generate much of its growth over the next few years through its African business. In February, the company’s general manager Temel Kotil said: “Africa is increasingly important for Turkey and THY. We are aiming to become the leading carrier in the continent.”

The carrier already flies to 18 African destinations and will add eight new routes this year out of a total of 18 new routes worldwide. They include Abuja and Kano in Nigeria; Kinshasa in Democratic Republic of Congo; Kigali in Rwanda; Abidjan in Côte d’Ivoire; and Mogadishu in Somalia. THY is the third airline to resume flights to Mogadishu and the first non-African airline to fly to the airport for two decades.

In October, Turkey’s BMC announced that it had set up a joint venture with Nigeria’s ABG Group to develop an automotive parts assembly plant in Nigeria. N10bn ($63.3m) will be invested in the first instance, although production capacity could be ramped up in the future. Nigeria’s Minister of State for Trade and Investment, Samuel Ortom, said: “We are going to ensure we provide enabling environment for auto industries to be revived in the country because we have the potential to attract more companies to the sector.”

Indeed, it is in manufacturing that Turkish commercial interests can have the greatest impact, particularly if they are prepared, as with BMC, to share knowledge with local partners. The Turkish voice carries some weight across Africa. Its domestic economy grew by an estimated 8% last year and although Ankara expects that rate to halve this year, the country is widely seen as a success story.

The involvement of another foreign power in the continent is perhaps most important in terms of further reducing dependency. Where most African states were previously dependent on Western Europe and North America for trade, Asia’s rapidly developing economies provided some diversification.

Yet while the impact of Asian investment has yet to sink in, a third generation of national economies has been attracted by the lure of Africa. Some, such as Turkey and Brazil, have historic ties to the continent but as successful economies in their own right are able to pass on the knowledge gained on their own paths to development. While Brazil’s Vale is a driving force in the Mozambican coal sector, THY is becoming an important player in African air travel. A multi-polar world is fast becoming reality and it seems like Africa can only benefit from this.

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Written by African Business Magazine

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