There is a lot to be said or written about Turkey; both positive and negative, optimistic and pessimistic. However, for all its economic promise, Turkey is undoubtedly undergoing a period of turmoil, as it faces the devaluation of its currency, earthquakes striking its western regions and a bomb attack in Istanbul (blamed on Kurdish rebels), which led to Turkish president Recep Tayyip Erdogan threatening to retaliate against Syria.
Due to its geographic location, Turkey has always been viewed as a link between the east and the west, and more recently a bridge between the Muslim world and the EU.
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In 2022, following the Russian invasion of Ukraine, Turkey (and Erdogan in particular) has been looking to act as a link between Russian President Vladimir Putin and Nato. Erdogan played a key role in extending the Black Sea grain deal, which Putin has changed his mind about, suddenly pulling out of the deal in October following discussions with the Turkish president.
Africa has been an area of focus for Turkey over the past few years, as it seeks to expand its influence in the continent and act as a regional power.
John Kourkoutas, managing director at business consulting and services company MrExportToAfrica, explains that Turkey’s current policy of engagement with Africa officially started in 2005 after Turkey declared it “the year of Africa” and adopted a new policy of “opening up to Africa”. “It is a rather brilliant approach which is long term and fruitful,” he says. “It is a case study that many countries should examine and mimic to some extent.”
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How much Turkish FDI goes to Africa (and where does it go)?
Turkish businesses are popping up across Africa, as they search for opportunities to boost exports and increase revenue by gaining exposure in the continent.
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By GlobalData“Turkey needs to find new clients for its industrial, military, retail and other products, in order to continue to expand and diversify its economy and sustain itself,” says Kourkoutas. “Its total trade volume with Africa has expanded from $3bn in 2003 to $26bn in 2021.”
On a regional basis, the Middle East and North Africa (MENA) ranked third and sub-Saharan Africa fourth in terms of Turkish outbound foreign direct investment (FDI) in the three-year period between 2019 and 2021, according to our FDI database.
Western Europe and central and eastern Europe/the Commonwealth of Independent States were the leading markets for Turkish FDI in this period. However, MENA and sub-Saharan Africa attracted more projects than North America, Asia-Pacific and Central and South America, highlighting just how important Africa is to Turkish businesses.
Software and IT services and communications and media were the top sectors for Turkish FDI projects in the MENA region between 2019 and 2021. Business and professional services, tourism and education also attracted a high level of FDI projects.
In sub-Saharan Africa, Turkish investment primarily went towards the tourism, metals and minerals, construction materials, logistics, business and professional services, education, and financial services sectors.
An example of Turkish investment in the African tourism sector came in 2020 with the announcement that Continent Worldwide Hotels, the Turkey-based hospitality management and hotel development company, would open hotels in Ethiopia, Ghana, Kenya, Malawi, Nigeria and Togo.
According to our database, Turkish investors launched business in several sub-Saharan African countries during this three-year period, including Angola, Cameroon, Cape Verde, Côte d'Ivoire, Ethiopia, Ghana, Kenya, Malawi, Mali, Nigeria, Rwanda, Senegal and Togo.
As for the MENA region, there were Turkish FDI projects in Algeria, Egypt, Iran, Iraq, Israel, Libya, Morocco, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
These figures show that Turkish FDI has a clear Africa focus, but the country is not alone there. Many countries, aware of Africa's vast potential, have been highly active in the continent over the past few decades, notably China. The sheer volume of China's investment in Africa means that Turkey is unlikely to compete with the Asian country on an FDI level, but Africa is a big place and there remains ample opportunity for Turkish investors.
