Turkish Eyes on Africa

Turkish firms in Africa

As a result of diplomatic efforts over recent years, Turkey has dramatically upped the number of missions it maintains in Africa, from just seven in 2009 to 34 today.

As a result of diplomatic efforts over recent years, Turkey has dramatically upped the number of missions it maintains in Africa, from just seven in 2009 to 34 today. The unfurling of the crescent and star at embassies across the continent is oft-followed by the announcement of a new direct flight from Turkish Airlines—the flag carrier now flies to 34 African countries directly over 51 routes, up from flights to just seven countries in 2009—and inevitably the announcement of business ventures.

While Turkish attention is widespread across Africa, East Africa draws the majority of Turkish investment and aid. Back in June, the Financial Times reported that USD400 million from Turkey’s aid budget has been committed to Somalia over the past five years. And it is neighboring Ethiopia, Africa’s ninth-largest economy as of 2015, which has become the largest recipient of Turkish investment. Speaking to the press in March, Turkish envoy to Ethiopia Fatih Ulusoy commented that the country has “attracted USD2.5 billion of the total USD6 billion Turkey has invested on the continent.” Naturally, Turkish Airlines has daily flights from Istanbul to Addis Adaba, helping to facilitate investments such as the Awash-Kombolcha-Hara Gebeya Railway, on which Turkish construction firm Yapı Merkezi is playing a leading role, bringing together Türk Eximbank and European financiers on the USD1.7 billion project.

Nigeria has also been in Turkey’s sights, with ambassador Hasan Çakıl announcing at a dinner on Saturday to mark the 93rd anniversary of the founding of the Republic of Turkey that trade between the two nations stood at USD600 million in the first seven months of 2016, noting that while the figure appears to have dropped from 2015, this was attributable to decreases in oil and gas prices rather than quantity. He also added that 70 Turkish firms operate in Nigeria.

It is easy to see why Turkey is so keen to move into Africa. The continent has grown at around 5% a year over the last decade, while, according to the Turkish Ministry of Foreign Affairs, the African economy will be worth USD29 billion by 2050, larger than the 2012 combined GDP of the US and eurozone.

By far and away the strongest Turkish business presence in Africa is in the construction sector. In 2015, 43 Turkish firms made an Engineering News Record (ENR) list on the world’s 250 biggest contractors by investment in Africa. Öztürk Construction, entering the list for the first time following a consolidation of its subsidiaries, was the highest-rated Turkish firm and 18th overall. Having entered the African market 10 years ago, Öztürk Construction is present in Guinea, Ghana, Cameroon, Angola, Tanzania, Zambia, and Sudan. It recently won a tender for a USD740 million dual carriageway in Cameroon, and has so far completed investments worth a total of USD5.7 billion in sectors as varied as energy, education, mass housing, and healthcare.

The second Turkish firm on the list, coming in in 37th position, is Rönesans MEA, which in mid-2015 opened its first project in Nigeria: a Sheraton Four Points hotel. The company is also involved in hotel and shopping mall projects in Lagos, Abuja, and Port Harcourt.

Other well-placed Turkish firms include Limak Holding, which is currently working with fellow Turkish firm Summa to complete a new, EUR466 million airport in the Senegalese capital Dakar, after which it will establish a JV with the Senegalese government to manage the airport for a period of 25 years. Developing on a recent trend of Turkish contractors building airports abroad, Mapa Construction, 177th on the ENR list, is heading up the construction of a new terminal at Ghana’s Kotoka International Airport in Accra.

Earlier in 2016, TBY also spoke with Turkish company Karpower’s now former Regional Coordinator Robert Kremer. The firm is the owner of a number of “powerships,” or floating power station barges that can be quickly plugged into struggling grids. The firm currently feeds 210MW into the Ghanaian energy matrix, with another 450MW powership under construction and set to sail for Ghana upon completion. Speaking to the benefits of investing in Ghana, Kremer told TBY that, “our strategy in West Africa is to make Ghana our power hub. Ghana is the sweet spot in this region and it offers easy access to other countries such as Cote D’Ivoire, Togo, Benin, Nigeria, Mali, and Burkina Faso.”

But Africa is certainly not simply the preserve of large, already-established constructors, and has also fallen onto the radar of Turkish entrepreneurs. In late October, English periodical the Hürriyet Daily News covered the story of Halit Karabaşoğlu, a Turkish businessman who set up a betting company in Ghana in 2012. The firm now has 200 locations in 10 states, earning EUR35 million a year. With plans to move to Kenya, Uganda, and Tanzania, Karabaşoğlu expects to employ 10,000 people by 2018 and generate EUR100 million a year.
Turkey’s pragmatic approach to building bilateral ties has, for years, enabled the international expansion of Turkish firms. With Africa a rising star, the continent will likely remain a key destination for Turkish diplomats and the businessmen they have in tow.

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