Business

Turkey cashes in on outreach Africa

Martyn Davies, Matthew Miller

But trade with South Africa, the gateway to the southern region, has declined.

Somali President Sheikh Sharif Sheik Ahmed and Turkish Prime Minister Recep Erdogan, who is on a trip to Africa, cementing Turkey’s ties with the continent. (AFP)

When Turkey's Prime Minister Recep Erdogan touched down in Libreville, Gabon,on January 6, his historic visit was quietly overlooked by major media outlets in New York, London and Johannesburg but the Turkish premier's first foray into West Africa is a highly significant milestone in the story of Turkey's African adventure. Erdogan's three-nation itinerary also includes official visits to Niger and Senegal.

This trip, viewed in the wider context of Turkey's burgeoning Africa policy, is indicative of the country's increasingly assertive diplomatic and economic foreign policy. It shows Turkey's new confidence as a leader in the global South and it represents an opening, and an opportunity for the continent at large, and particularly for South Africa.

Ten years ago, Turkey launched an Africa strategy, which was at the beginning of its own economic boom. During this period, Turkey has pursued an active foreign policy towards the developing world, from Africa to the Arab world and other frontier markets. Some commentators have said that Turkey's new orientation is a natural fit: Turkey is a Muslim majority country that  shares customs with nations stretching from Mali to Malaysia and it was also unsuccessful in joining the European Union club. Others point to Erdogan's own humble origins and his affinity with the poor and powerless, like his former Brazilian counterpart, Lula da Silva.  

Turkey and South Africa, both members of the G20 and leaders of the emerging global South, are logical partners and allies in the new geopolitical and geoeconomic environment. Both are gateways to their own regions: South Africa to the Southern African Development Community region and Turkey to Central Asia and the Middle East.

This begs many questions: Why has bilateral trade between South Africa and Turkey decreased in the past two years despite the overall increase in trade between Turkey and other African markets?  How can trade between the two economies be boosted?  What are the prospects for a free trade agreement (FTA) and why did Pretoria reject an overture from Ankara to sign such an agreement in 2011?

South-South diplomacy
In 2009, Turkey had 13 embassies in Africa. In early 2013, that figure will have more than doubled to 34. With foresight and purpose, Erdogan's government designated 2005 "the year of Africa", and that same year the prime minister became the first Turkish leader to visit sub-Saharan Africa, logging trips to South Africa and Ethiopia.

This trip was followed by a series of initiatives seeking to position Turkey within the orbit of developing nations, including the hosting of a summit of least developed countries (33 of which were from Africa) and the inauguration of an African Studies Research and Application Centre in Ankara.

This outreach has paid dividends:  Turkey was able to secure a non-permanent seat on the United Nations Security Council, thanks to the support of 51 of the 53 African countries.   

Turkey's significant leadership role in supporting the transition in Somalia was also a diplomatic coup of sorts.  After the al-Shebab terrorism group fled Mogadishu in 2011, the Turks were the first to put "boots on the ground", landing hundreds of development and aid workers.To date, Turkey has provided $51-million in development aid to the country. Erdogan himself he was the first non-African leader to visit the capital city since 1991.   

Turkish economic statecraft
The Turkish ministry of economy reports that the instruments of this Africa strategy include "fairs, trade missions, business councils, joint Economic Commission mechanisms, new commercial offices and agreements. The strategy also entails supporting WTO [World Trade Organisation] accession, providing technical assistance and increasing banking activities."

By all objective measures, these policies have been very successful with Turkish exports to Africa increasing 390% from 2003 to 2011, from $2.1-billion to $10.3-billion, and imports to Turkey increased 163% from $3.3-billion to $8.7-billion during the same period.

Moreover, Turkish outbound investment to the continent exceeded $5-billion in 2011.

Most notably, the African Dev­el­opment Bank (AfDB) and the Organisation for Economic Co-operation and Development's African Economic Outlook 2011 included Turkey in the list of Africa's top five emerging partners, the others being China, India, Brazil and South Korea. Turkey is one of the non-African (non-regional) members of the AfDB.  

Turkey has completed FTAs with Arab North African countries including Egypt, Morocco and Tunisia, as well as with Mauritius, and is seeking an FTA with the East African Community, a customs union between Kenya, Uganda, Tanzania, Burundi and Rwanda, by 2019.

The Turkish model of economic growth figures prominently in the country's Africa strategy.  Investments in infrastructure, beginning in the 1980s, supported the development of manufacturing industries, notably in textiles, minerals and energy.

Today, more than 400 Turkish small and medium enterprises (SMEs) have found markets in Africa, drawing on experience in working in developing countries in the Middle East and Central Asia. Turkish companies also have gained competitive advantages over European and Chinese competition.  

Gateway South Africa?
South Africa and Turkey have established strong relations through bilateral visits between the countries' leadership and two-way trade. In 2011, Turkish exports to South Africa were $508-million, and South African exports to Turkey totalled $1.9-billion. But a proposed FTA was not warmly received by South Africa in 2011, which claimed that it would have a negative impact on local industry and jobs.

Furthermore, although overall trade between Turkey and African countries has increased, trade between the two countries decreased by more than 50% between 2008 and 2010.

For much of the past decade, Turkey's growth domestic product growth has been more than 7% and as a result its economy has been ranked in the top 20 globally. It has a sizeable population of 75-million and is strategically positioned, straddling Europe, Central Asia and the Middle East.  Despite this, Turkey is largely off the radar for South African firms. But, in light of the country's new foreign commercial policy in Africa, there is an opportunity for South African business to explore opportunities in Turkey, a foremost emerging market.

Martyn Davies is chief executive of Frontier Advisory and Matthew Miller is a global leadership fellow at the World Economic Forum

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