Turkey exports to Africa

Turkey, Africa’s New Favorite Import Destination

Bridging between Asia and Europe, Turkey has always played a remarkable role in trade since the time of antiquity. It has been the crossroad of the Silk Road, the most ancient network of trade routes in history. In fact, the Silk Road or the long road was not only a conduit of commerce but also a melting pot of different cultures. Merchants were trading varieties of goods like silk, spices, jewels, paper, grain, porcelain, vegetables, and fruits. Those goods were transported from China and South East Asia through the Indian Ocean to Africa, India and the Near East (UNESCO, 2019).

Yet, the country economic prosperity was shaken heavily after the collapse of the Ottoman Empire and the outbreak of the World War I. Till 1980, the Republic of Turkey has experienced the darkest era of its history. In effect, the Turkish government failed to pay its debts. In reality, the Turkish empire was even unable to pay interests on foreign loans; which led the economic situation to reach its lowest. These economic crises left the country with a high unemployment rate, poverty, and serious inflation. Still, Turkey economy succeeded in rebuilding itself after major reforms made mainly on the trade industry. Eventually, the country tried to shorten the gap between imports and exports by promoting an export-led growth strategy.

Turkey’s economic potential

Indeed, the legacy of Turkey’s resilient economy continues in today’s world as the country’s economic potential reached its uttermost in the two last decades. Turkey has a GDP of 851.10 billion US dollars (World Bank, 2017) that pillars on the agriculture, Industrial Steel-Iron, tourism, construction and contracting sector. Moreover, Turkey has a strong economic structure.  Thanks to its large and diversified internal market, well-regulated banking sector, low public debts and mainly its large investments in vital sectors as energy, transport, and health. Consequently, this latter enabled the country to stand strong in the middle of the recent political and international economic instabilities.

In the process of minimizing the gap between Turkey exports and imports, the country is working on growing its exports. In fact, Turkey is offering good quality and competitive prices in addition to facilitating regulations of the shipping process. However, robust and diversified sectors are backing up Turkey’s economy: 

The automotive sector

Turkey is the 17th largest auto producer in the world and 5th largest in Europe; the production consists of automotive components, parts, modules and systems fitting motor vehicles. Certainly,  the country could rank this high after the investments of 14 original equipment manufacturers (OEMs) of 14 billion USD and the continuous hard work in improving the supply chain, R&D, engineering and labor force. This sector represents the country main manufacturing and economic driving power, as it is the largest sector in the Turkish economy. In 2018, Turkey reached 83.3 percent in the exports of its total production with $31.6 billion and aims to exceed $32 billion in 2019 (Anadolu Agency, 2018).

Machinery and electrical equipment

This sector is growing dramatically; as it quadrupled its revenues in the last 15 years to 20 USD billion. Turkey provides high quality and diversified range of products that answer the world market demands, in addition to cost competitive and skillful labor force. The sector is very ambitious as it contains a big share of small and medium enterprises representing 60% of the industry. Turkey could make of its machinery and electrical equipment production the second largest export sector with 9.3% of Turkey total exports to more than 200 countries; 60% to Europe and 22% to the MENA region and aims to double the share by the year 2023 (Turkish Machinery Foundation, Turk Stat, 2018).

Energy

Regardless of the country efforts in excavation and discovery of new fields of natural gas and oil, Turkey failed immensely. Turkey couldn’t be self-sufficient and still imports $37.2 billion from the world of mineral fuels including Oil (hurriyetdailynews, 2018). Nevertheless, Turkey is working hard to even up the score by topping the world in electricity production and exporting mineral fuels including oil to reach 2.8% of its total export.

Agrofood and beverages

The agriculture sector in Turkey is very prospering thanks to the country geographical position and favorable Mediterranean climate. This later enabled the country not only to be one of the rare countries in the world to be self-sufficient in food but also to balance the trade deficit and occupy the position of the 7TH largest agriculture producer worldwide. The most reputable agriculture products are dried figs, hazelnuts, pistachios, sultanas/raisins, dried apricots, watermelons, red meat, fish, honey, milk, and dairy…etc.  Concerning the beverage business, Turkey has 516000 hectares of vineyard and suitable climate for massive wine production of various type of grapes. The country exports $17 billion with 1781 types of agricultural products to 190 countries (hurriyetdailynews, 2018).

Finance

The financial sector in Turkey is led by banking as it represents 70% of it. Banking is booming in Turkey thanks to the multiple reforms and regulations done by the governments. Those reforms are meant to boost Turkey’s growth. As a result, the Turkish economy welcomed huge amounts of foreign direct investments. Turkey has a total of 51 banks. Twenty-one of them holds significant foreign capital investments (30% of total assets are held by foreign investors). The success the country is achieving in the banking sector encouraged it to launch the Istanbul Financial Center project.  The project serves the country dream to be an international financial hub by 2023. All these achievements were reflected in the trade of financial & insurance services that has significantly increased.

Turkish Textile

Starting from small workshops in the late ‘60s, the textile and apparel are the most important industries in today’s Turkish economy. Practically, the textile exports account for 9.4% of the country total exports that are $175 billion in 2017. Thus, this number is expected to increase.  Moreover, Turkey is betting on the quality and the prices it offers compared to the competition in the international market. By 2023, the country set as a goal to top $50 billion (knittingtradejournal, 2017).

Turkey ambitious goals are a result of efforts done on various levels. 

  • Development of qualified human capacities,
  • Investments in various industries attracting capitals internally and externally, 
  • Investments in advanced technology,
  •  The capability of making massive volumes of production.

The Turkish government set fundamental strategies to ensure continuous prosperity. In 2009, the government of Recep Tayyip Erdoğan launched the project  “Turkish Exports Strategy for 2023”.  The project aims to reach $500 billion of export (Joseph De Coster, 2018). To do so, Turkey is planning to expand the market of export by operating further-out of its traditional markets; Europe and the MENA region. Africa is the perfect candidate for Turkey’s ambitions. The continent is an untapped market, with a massive population estimated at 1.305 billion (Worldmeter, 2019).

Turkey’s exports to African countries on the increase

Africa is the world new center of attention. As the number of emerging economies increases, different countries showed interest in doing business with the African continent. Likewise, Turkey is trying to prove itself in the African market and survive in the fierce competition. Africa has signed agreements with the most powerful economies. Such as the Africa-South America, Africa-India and Africa-South Korea partnerships. Thus, Turkey created the “The Turkey’s Africa strategy” that resulted in different outcomes including:  

  • Turkey has opened 19 new Embassies in Africa.
  • Turkey has created 23 Joint Economic Commissions, 4 Free Trade Agreements, 8 Double Taxation Prevention Agreements, and 17 Business Councils with African countries.
  • New African destination where linked to turkey by the Turkish Airlines.
  • Turkey’s exports to Africa increased from 14.1 billion US in 2013.
  • Turkey’s imports from Africa increased to 6 billion USD in 2013.

The Turkey exports to Africa increased from 2003 to 2017 reaching $11.6 billion whilst the imports did barely attain $7.1billion. Nevertheless, Turkey is economically very ambitious and wants to become in the top 10 world’s economies by 2023. Turkey policy relies mostly on international trade to create new prospect for its economy. Thus “The Turkey Africa strategy” helped in strengthening its presence in Africa. Consequently, it led to facilitating trade operations and encouraged more business opportunities for both partners. Furthermore, Turkey is committed to reaching opportunities available all over the continent. To ensure the continuity of the long-lasting business relationship between Turkey and Africa, the Turkish ministry of economy and the African Union commission organized jointly the “The Turkey Africa Forum”.  

Turkey Africa Forum 2018

The Turkey Africa Forum took place in Istanbul in two executive days, hosting 3000 participants including 80 speakers and 60 ministers from 50 different countries. The forum program was very diverse; it incorporated conferences and presentations, panels, and government to business meetings (TABEF,2018). 

The forum has for objectives to create a platform of dialogue between Turkey and Africa.  This move will enable the two partners to discuss the current business situation, analyses the level of economic trade and seek new opportunities for Turkish investments in the continent. In addition, the forum will create future cooperation within the private sector entrepreneurs circle. Also, it will help in finding solutions for the obstacles challenging the affluence and progress of trade operations and market penetration. Overall, the Turkish government and African decision-makers are willing to facilitate the process of trade in terms of logistics and import/ export duties. Consequently,  the two partners signed three important agreements called memorandum of understanding (MoU).

  • The first pact is between the Senegalese Ministry of Mines and Geology and the Turkish Tosyalı Holding. This pact consists of serious investments in iron and steel initially in Senegal followed by the whole West African countries.
  • Second,  Turkey’s Trade Ministry and the African Union Commission signed a memorandum of understanding (MoU) for collaboration on trade and investment.
  • Lastly, the third trade agreements were signed by the Turkish and Zimbabwean governments (hurriyetdailynews, 2018).

Importing from Turkey to Africa

Africa main imported Turkish goods are machinery and electricity, food product, textile and clothing, transportation, and vegetables (WordintegratedTradeSolution, 2016). The following table shows in average the medium prices issued on Turkish imports in different sectors towards African ports.   

Country Food products Textile
Cotonou 1800 USD 2200 USD
Lomé 1800 USD 2200 USD
Abidjan 1500 USD 2000 USD
Tema 1600 USD 2200 USD

Either in Turkey or Africa, there are many agencies that offer freight forwarding services. For example, the most reputable Turkish freight forwarders are Armada Logostics, Kaplan Denizcilik Nakliyat ve Conturk shipping, Hellmann, Innova Global, Anadolu Maritime Logistics & Trade Ltd and MCL Logistics.  Accordingly,  you can learn more on freight forwarding by reading our latest article ‘How to choose a Freight Forwarder’.

Moreover, the best part about importing from Turkey is that the government supports companies and entrepreneurs.  For instance, the Turkish government refunds the freight agencies in an attempt to encourage them to export to international markets. This latter minimizes fraud in rates from an agency to another.

How WaystoCap can help you import from Turkey.

The added value that WaystoCap offers to its clients is assistance through all the import-export operations. From finding a verified supplier in Turkey to a suitable freight forwarder. WaystoCap helps you choose the best way of transport, find a warehouse for your merchandise and mainly the best prices in the market. Similarly,  one of the Turkish brands that achieved their African dream is DOGA pasta. Likewise, WaystoCap helped African traders to import Doga’s products from Turkey to Benin. DOGA pasta is a Turkish brand that succeeded in penetrating the African market through the help of WaystoCap Local, to get to know more about this brand success story read more on “How DOGA Pasta became a family favorite brand in Benin!”.

 

References

About the Silk Road

Turkey

WHY INVEST IN TURKISH MACHINERY INDUSTRY?

Turkey, African countries sign trade pacts in Istanbul

Products by Sector Imports by Sub-Saharan Africa from Turkey 2016

Turkey aiming to top $50b in textile exports by 2023

How has “Turkey’s Africa Strategy” been Affecting Turkey’s Exports to Africa?

THE EXPORTS STRATEGY OF TURKEY FOR 2023

The Turkish textile and clothing exporters in bullish mood

An overview of Turkish textiles and clothing industry

Turkey economy

Africa Turkey Forum

Turkey Aims For Top 10 By 2023

Turkey – Energy-Prospects-and-Mining Renewables- Smart Grid-Gas-Power Generation

Turkish Machinery Sector

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