In this article, we discuss the import, export and investment opportunities in the African countries. You can find the individual country profiles and sector analysis through the following links. Africa is a high-growth economy and there are many areas for development. All businesses should have an eye on countries in this continent.
Africa consists of historically rich and diverse countries. There is an estimated of 1500-2000 African languages, and more than 3000 tribes in the continent. After the African Independence Movement in 1960s, the economic shape of the continent dramatically changed. The newly formed countries not only kept their historical ties with European countries, but also made trade agreements with American and Asian countries. As a result, the Gross Domestic Product of the continent increased significantly.
When we consider the effects of globalism and population increase, the total GDP is expected to rise faster. However, the African continent is still behind other geographic areas, such as Latin America, East Asia and Middle East. This underdeveloment is caused by major political, social and economic issues: most notably civil wars, lack of infrastructural development, health problems and political system. However, there is a great potential for the development of Africa.
The Sub-Saharan Africa region shows unique characteristics when compared with North Africa. That is why, in some analysis, we separate these 2 regions and include North Africa into Middle East. Sub-Saharan African countries does not have similar GDP and GDP-per-capita levels compared to other developing countries in Latin America and East Asia.
Global Trade Trends
Starting from 2018, international trade faced significant challenges after the implementation of tariffs on steel and aluminum by Trump administration. On July 6, USA imposed additional tariffs on Chinese goods worth of $200 billion. These additional tariffs were the beginning of a time called “Global Trade Wars”.
Secondly, the long-term effects of Brexit on global trade is still unknown. United Kingdom’s integration to the European Union single market has not been determined. In March 2019, the Brexit deal will be voted and shaped, however, the market players are still uncertain about its outcomes.
In response to the tariffs from the USA government, China declared the preperation of a new foreign investment law. The new foreign investment law can be used as a leverage during the trade negotiation with USA and could amplify the costs of the trade war. According to the study of The National Bureau of Economic Research, the trade war had a negative annual effect of $7.8 billion on the US economy.
Position of Turkey in Africa
In a negative trade environment, Turkish companies should look for new markets to mitigate risks. The Turkish Government negotiates Free Trade Agreements in the new markets, such as Ghana, Sudan, Djibouti and Cameroon. Also, there are efforts to initiate trade and investment cooperation with West African countries. In the recent years, Turkey hosts international conferences and forums to boost its exports and gain advantage in the international trade arena.
Turkey currently has Free Trade Agreements with Mauritius, Egypt, Morocco and Tunisia in Africa. Also, Free Trade Agreements with Ghana, Sudan, Djibouti, Democratic Republic of the Congo, Cameroon, Chad and Libya are under negotiation. Turkey took part in the Trade and Investment Cooperation Agreement with West African Countries: Benin, Burkina Faso, Côte d’Ivoire Green Cape, Gambia, Ghana, Guinea, Guinea Bisau, Liberia, Mali, Niger, Republic of Nigeria, Senegal, Sierra Leone and Togo.
In a volatile trade environment in the developed markets, Turkish companies can gain important potentials in the African markets. Most of the countries in Africa are net importers and high-growth markets. The infrastructure system is developing fast with recent investments. Finally, Turkey is negotiating Free Trade or Cooperation agreements with major African countries and the investments in this region is expected to be safer in the near future. Turkish companies should follow news from Africa to gain commercial benefits.
Country Profiles in Africa
Located in the North Africa, Algeria is the 10th largest country in the world in terms of total land area. Its GDP is $170 Billion and its population is 41 million. Algeria has strong economic relations with Europe and other Arab countries thanks to its ports in the Mediterranean Sea.
Algeria was a French colony until 1962, and they gained independence after Algerian War. Its official language is Arabic and Algiers is the capital city of the country. Sonatrach is one of the most influential Algerian companies, specialized in petrochemicals. It employs more than 100,000 people and has operations in Libya, Mauritania and Yemen.
Their biggest import partner is China and they import products from various sectors, including broadcasting equipments and iron structures. After China, European countries are the main import partners. 94% of Algeria’s exports are petroleum products and they are mainly exported to European countries and to USA.
There have been strong economic relations between Algeria and Turkey. Especially in the construction sector, Turkish companies completed $13.6 Billion worth projects in Algeria by 2016. Turkish exports concentrate on building materials, machinery and vehicles. There are well-established Turkish companies in Algeria, and new investors can find opportunities in construction materials and machinery products.
Located in the South-Central Africa, Angola is bordered by Namibia, Democratic Republic of Congo and Zambia. It has a population of 30 million people and its economic output is $124 Billion. Angola has vast mineral and petroleum reserves, which increases the growth rate of its economy. Angola is a member of the United Nations, OPEC, African Union, the Community of Portuguese Language Countries, and the Southern African Development Community.
Angola gained independence from Portugal in 1975 and it became a member of United nations in 1976. The official language of Angola is Portuguese and its capital city is Luanda. Angola’s economy is mostly driven by oil sector. Oil production and its supporting activities constitute approximately 50% of GDP, more than 70% of government revenue, and more than 90% of the country’s exports.
Angola’s main trade partner in both imports and exports is China. Angola’s 97% of exports to China is crude petroleum. In return, Angola imports diverse set of products from China, including buses, footwear and electronics. Portugal is the second import partner of Angola thanks to the historical relationships and the imports from Portugal are concentrated in chemicals and food.
Turkey and Angola established diplomatic relations in 1980. Turkey’s exports to Angola concentrate on food sector, such as pasta, wheat flours, yeast and poultry meat. Angola imports almost 50% of its food from foreign countries, and we advise our clients to focus on the food products. In 2017, the 1st Session of the Joint Commission on Trade, Economic and Technical Cooperation between Angola and Turkey took place in the Angolan capital. Turkey was represented by Minister of Customs and Trade, Bulent Tufenkci.
The Republic of Cameroon is located in Central Africa and it is bordered by Nigeria, Chad, Central African Republic, Equatorial Guinea, Gabon and Republic of Congo. The population of Cameroon is 24 million and its GDP is $34 Billion.
Cameroon gained independence from France in 1960 and completed its union with former British Cameroon in 1961. English and French are the official languages. Its capital city is Yaounde and its largest city is Douala, which has a large shipping port and approximately 10 million population. The country has faced civil unrest between English-speaking regions and French-speaking regions in 2017.
Cameroon’s main import and export partners are France and China. Cameroon has petroleum reserve and also has a forestry industry. The country is also specialized in producing cocoa beans and other cocoa products. It imports a wide range of products.
The international and commercial relations between Cameroon and Turkey accelerated after the visit of Cameroonian Presiden Paul Biya to Turkey in 2013. Since that year, multiple cooperation agreements have been signed, and there have been efforts to have a closer partnership. Turkish exports to Cameroon increased significantly in the last 10 years from $32 Million to $97 Million.
Democratic Republic of Congo
The Democratic Republic of the Congo is located in the Central Africa and it is bordered by Republic of Congo, Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola. Congo’s population is 82 million and its GDP is $37 Billion. Congo is a member state of the United Nations, Non-Aligned Movement, African Union, and COMESA.
Congo gained independence from Belgium in 1960 and current constitution was established in 2006. French is the official language, and there are 4 recognised national languages: Lingala, Kikongo, Swahili and Tshiluba. Its capital city is Kinshasa with 10 million population.
Congo’s main import and export partner is China. Congo has rich natural resources, including cobalt, copper and diamongs. crude petroleum and cocoa beans also play important role in Congo’s economy. Mineral and metal exports’ share in the economy is more than 80%.
The first Turkish Embassy in Kinshasa opened in 1974 and Congo opened its embassy in Ankara in 2011. Turkish exports to Congo increased significantly in the last 10 years from $9 Million to $27 Million. The exports are concentrated in the food sector, including chicken meat, pasta and yeast. Since Congo imports most of its food, companies in the food sector can focus on exporting to Congo.
Egypt is the third largest economy in Africa and it is located in the north part of the continent. Egypt has a population of around 100 million people and its GDP is $235 billion. Egypt has a strategic location and the Suez Canal is located in this country.
Egypt was part of the British Empire until it gained independence in 1922. Its official language is Arabic and capital city is Cairo. The population of Cairo is 20 million and the population of the second biggest city, Alexandria, is around 5 million. Egypt’s economic growth slowed down following the political events in 2011.
Egypt’s biggest import partner is China and they import diverse range of products from them. Egypt especially imports industrial products and food. Egypt mainly exports its products to Middle East, Turkey and Europe. Their exports are concentrated in petroleum, gold and textiles.
Turkey has more than $2 Billion direct investment in Egypt and Turkish companies employ more than 75,000 Egyptian employees. Main sectors of Turkish companies operating in Egypt are textiles, automotive and financial services. There are ongoing initiatives for opening a Turkish-Egyptian University and industrial zones. There are important opportunities in exporting consumer goods and industrial products.
Federal Democratic Republic of Ethiopia is located in the North East Africa and it is bordered by Eritrea, Djibouti, Somaila, Sudan, South Sudan and Kenya. Ethiopia’s population is 105 million and its GDP is $81 Billion. Ethiopia is the headquarter of the African Union, the Pan African Chamber of Commerce and Industry, the United Nations Economic Commission for Africa, the African Standby Force, and many of the global NGOs focused on Africa.
Ethiopia has an ancient history and the current constitution was established in 1995. The official language of Ethiopia is Amharic. Its capital city is Addis Ababa and its population is around 3.5 million. Eritrea seperated from Ethiopia in 1993 and declared its own independence.
Ethiopia’s main trade partner is China both in imports and exports. 33% of goods is imported from China and 16% of goods is exported there. The country’s economy heavily depends on agricultural products and precious metals. More than 60% of exports is agricultural products such as coffee and oily seeds. 11% of its exports is gold. Turkey is an important import partner with 4.2% share in 2017.
Turkey and Ethiopia has close economic relations. Most of Turkish foreign direct investment is in textiles sector and there are further efforts to increase Turkish investment in Ethiopia. Turkish companies invested more than $2.5 Billion in the country. The construction sector and construction products play an important role in Turkish exports. Raw iron bars had 24% share in total exports in 2017.
The Republic of Ghana is located in the West Africa and it is bordered by Ivory Coast, Burkina Faso and Togo. Ghana’s population is 29 million and its GDP is $47 Billion. Ghana is a member state of the Non-Aligned Movement, the African Union, the Economic Community of West African States (ECOWAS), Group of 24 and the Commonwealth of Nations.
Ghana gained independence from the United Kingdom in 1957 and current constitution was established in 1992. English is the official language, however there are 20 recognized national languages. Its capital city is Accra.
Ghana’s main import partner is China with 23% of total imports. China is followed by the United States with 8% share. Ghana has gold resources and gold accounted for 49% of total exports in 2017. crude petroleum and cococa beans also play important role in Ghana’s economy.
The first Turkish Embassy in Accra was opened in 1964. Turkish foreign direct investment in Ghana is around $500 Million and it is expected to increase with new trade agreements. Turkish businessmen visit Ghana on many occasions to explore opportunities. Turkish construction companies have ongoing projects in Ghana such as Kotoka International Airport. Turkish importers can benefit from the cocoa business in Ghana.
Ivory Coast (Côte d’Ivoire) is located in the West Africa and it is bordered by Guinea, Liberia, Burkina Faso, Mali and Ghana. Ivory Coast’s population is 24 million and its GDP is $40 Billion.
Ivory Coast gained independence from France in 1960. French is the official language, however there are 78 spoken local languages in Ivory Coast. Its capital city is Yamoussoukro. Its largest and commercial city is Abidjan and its population is around 4.5 million.
Ivory Coast’s main import partner is China with 20% of total imports. China is followed by France and Nigeria. The economy of Ivory Coast relies on agricultural and food products. Around 70% of all exports is related with the food sector. Ivory Coast is also one of the leading rubber producers.
The first Turkish Embassy in Abidjan was opened in 2009, however the diplomatic relations were established in 1964 thanks to the embassy in Dakar, Senegal. Turkish exports to Ivory Coast increased significantly in the last 10 years from $47 Million to $142 Million. The exports are concentrated in the construction materials and food sector. Ivory Coast is an important country for food producers thanks to their production of cocoa beans, coconuts and cashews.
Kenya is located in the East Africa and it is bordered by Ethiopia, Somalia, South Sudan, Uganda and Tanzania. Kenya’s population is 50 million and its GDP is $74 Billion. Kenya is a member of United Nations, World Bank, International Monetary Fund, COMESA, East African Community trade bloc and other international organisations.
Kenya gained independence from United Kingdom in 1963 and republic was declared in 1964. The official languages of Kenya are English and Swahili. Its capital city is Nairobi and its population is around 3 million. Nairobi is also the biggest city and center of commerce.
Kenya’s main import partner is China with 23% of total imports. China is followed by India with 10% share. The country’s economy heavily depends on agricultural products, especially tea. Textile industry is developing in Kenya in 2017, it accounted for 8% of total exports.
The commercial relations between Kenya and Turkey have incerased significantly in the last 10 years. Total exports increased from $130 Billion to $190 Billion between 2008 and 2017. Fertilizers are the main export product of Turkey to Kenya with 26% of total exports in 2017. Kenya is an important market for Turkish companies which are willing to enter the East African market. It has one of the largest shipping ports and land connection to other major markets such as Uganda.
Libya is located in North Africa and it is bordered by Egypt, Sudan, Chad, Niger, Algeria and Tunisia. The population of Libya is 6 million and its GDP is $51 Billion. Libya has the 10th-largest proven oil reserves in the world.Libya is a member of the United Nations, the Non-Aligned Movement, the Arab League, the OIC and OPEC.
Libya gained independence from Italy in 1947. Arabic is the official language, and Italian and Berber are widely spoken. Its capital city is Tripoli with approximately 1 million population. Libya had a civil war in 2011 between forces loyal to Muammar Gaddafi and those seeking to change his government.
Libya’s main import and export partner is Italy. Turkey also has a considerable size in imports with 11% total share. Petroleum products play an important part in Libya’s economy, 97% of exports are related with petroleum products. The civil wars in the 2010s affected the economy of the country and decreased its economic output.
Libya and Turkey have close historical and cultural relations. Turkey was the first country to appoint an Ambassador to Tripoli after the Libyan Civil War in 2011.Turkish companies, especially construction companies, had strong influence before the Civil War. After the civil war, the trade between Turkey and Libya decreased significantly. There are ongoing negotiations regarding the unfinished projects in Libya.
The Kingdom of Morocco is located in the North West Africa and it is bordered by Algeria. Morocco’s population is 36 million and its GDP is $109 Billion. Morocco is a member of the Arab League, the Union for the Mediterranean and the African Union.
Morocco gained independence from France and Spain in 1956. The official language of Morocco is Arabic and French is a widely spoken foreign language. Its capital city is Rabat and Casablanca is the largest city. Morocco has political conflicts in Western Sahara region and it occupies 70% of lands in Western Sahara.
Morocco’s main trade partners are Spain and France. Almost 40% of the trade volume is with these two counties. Turkey is an important player in Morocco’s trade and it makes up 4% of the total trade volume both in exports and imports. Many European companies have foreign direct investment in Morocco in the textiles and automotive sector. The country has well diversified exports and imports in every sector.
Turkey and Morocco have historical relations since Otoman Empire. Morocco and Turkey have free trade agreement since 2006, which helps Turkish companies to export their products without tariffs. There are many Turkish companies that invested in Morocco and they also formed Turkish-Moroccon Businessmen Association (TUFIAD). Most of the Turkish exports concentrate in the automotive industry, such as cars, engines, iron blocs and trucks.
The Federal Republic of Nigeria is located in West Africa. It is bordered by Cameroon, Niger, Chad and Benin. Nigeria is referred as the `Giant of Africa’, due to its strong economy and large population. Its population reached 191 million in 2018 and Nigeria has the highest GDP in Africa with $375 Billion. Nigeria overtook South Africa in 2014 to become Africa’s largest economy. Nigeria is a member of African Union, United Nations, OPEC and Commonwealth.
Nigeria gained independence in 1960 from the United Kingdom. The official language of the country is English and its capital is Abuja. However, the biggest city and the industrial hub of Nigeria is Lagos. The population of Lagos is more than 20 million. Nigeria’s economy boomed thanks to oil industry. However, the economy of Nigeria is heavily dependent on oil price fluctuations.
China is the most important trade partner of Nigeria. Whereas, Nigeria exports most of its crude petroleum to India and USA. Nigeria has a positive trade balance, it exports more than it imports. However, the trade balance deteriorated due to decreasing oil price in the last years.
Turkey and Nigeria has diplomatic relations since the independence of Nigeria. Turkey opened an Embassy in Lagos, previous capital of Nigeria, in August 1962. Turkish businesses can find important opportunities in Nigeria thanks to its large and diversified economy. Manufacturing and food companies can use Nigeria as a hub to expand to other West African countries. The exports of Turkey to Nigeria are concentrated in industrial goods and agricultural products. Especially, processed iron is an important export good from Turkey to Nigeria.
The Republic of Senegal is located in West Africa and it is bordered by Mali, Guinea, Guinea-Bissau, Gambia and Mauritania. The population of Senegal is 16 million and its GDP is $16 Billion.
Senegal gained independence from France in 1960. French is the official language. Its capital city is Dakar with a population of around 1 million people.
Senegal’s trade partners are Mali, France and China. Senegal is one of the most important fishing countries in Africa. Gold and petroleum refinery also play an important role in Senegal’s economy. Finally, Senegal has rich sources of Phosphat. As a member of the West African Economic and Monetary Union (WAEMU), Senegal has close trade relationships Mali and Ivory Coast.
Turkey and Senegal have close commercial relations in the last decade. The exports to Senegal increased from $108 Million to $257 Million in the last 10 years. The development of bilateral relations agreement was signed between Turkey and Senegal in December 2017. Many Turkish construction companies have ongoing activities in Senegal. For example, Yapı Merkezi was the contractor of a €373 Million high-speed train project in Senegal. Finally, due to the development of relations, the General Manager of Turkish Eximbank was given the State Order of Senegal.
South Africa is one of the most developed countries in the African continent. It is bordered by Namibia, Botswana, Zimbabwe, Mozambique, Swaziland and Lesotho. Its population is 57 million and has $350 billion GDP, second after Nigeria. South Africa is one of the founding members of the African Union.
South Africa became an independent country in 1931 from the United Kingdom. Its official language is English, however there are local languages in specific regions. Its capital city is Cape Town, and Johannesburg is one of the biggest cities and economic hubs. South Africa is the headquarter of major African corporations, such as MTN Group and Sasol.
China is the most influential trade partner of South Africa. China has the highest share both in imports and exports. The most important export products of South Africa are precious metals such as gold and diamond.South Africa has a positive trade balance, it exports more than it imports.
In South Africa, there have already been big-scale investments of Turkish companies. For example, Arcelik bought Defy, a South African home appliances company, for 324 million dollars in 2011. There are also a considerable number of Turkish textile and mining companies in South Africa.The value of the Turkish investments in South Africa is more than $500 Million.
Republic of Sudan is in North East Africa and it is bordered by Egypt, Eritrea, Ethiopia, Central African Republic, Chad and Libya. It has a population of 40 million people and its economic output is $117 Billion. Since 2011, Sudan has been facing political and military conflicts in its southern regions.
Sudan gained independence from the United Kingdom in 1956. The official language of Sudan is Arabic and English. Its capital city is Khartoum. Sudan has rich mineral resources, including gold, granite, gypsum, iron, kaolin, lead, manganese, mica and natural gas. South Sudan contained 80% of Sudan’s former oil reserves.
Sudan’s main import partners are China, United Arab Emirates and India. Turkey is also an important player with 4% share in total imports. Sudan mainly imports food, textiles and machinery. In return, Sudan exports gold, vegetable oil and petroleum. Its biggest export partners are United Arab Emirates, China and India.
Turkey and Sudan has close diplomatic and commercial relations. In 2017, Turkish delegation of more than 150 businessmen visited Sudan to explore opportunities. Sudan is an important export market for Turkey and Turkish exports reached $400 Million in 2017. Turkey mainly exports food products and electric machinery to Sudan. The population and economy of Sudan are growing very fast and there are many opportunities thanks to Sudans’s large economy and close relations with Turkey.
The United Republic of Tanzania is located in the East Africa and it is bordered by Uganda, Kenya, Mozambique, Malawi, Zambia, Rwanda, Burundi and the Democratic Republic of Congo. Tanzania’s population is 58 million and its GDP is $42 Billion.
Tanzania gained independence from the United Kingdom in 1963 and current constitution was established in 1977. Tanzania does not have an official language, however Swahili and English are used nationally. More than 100 local languages are spoken in diffeernt regions of Tanzania. Its capital city is Dodoma, however Dar es Salaam is the largest city with 5 million population. The main commercial ports and industrial zones are located in Dar es Salaam.
Tanzania’s main import partner is China with 21% of total imports. China is followed by India with 15% share. Tanzania has vast gold resources and gold accounted for 30% of total exports in 2017. Agricultural products drive the economy of Tanzania, especially nuts.
The first Turkish Embassy in Dar es Salaam was first opened in 1979. There has been Turkish Airlines direct flights between Istanbul and Dar es Salaam since 2010 and it impacted the relations between Turkey and Tanzania. Turkish businessmen visit Tanzania on many occasions to explore opportunities. In 2018, agricultural machine companies attended a forum in Dar es Salaam to establish new connections. Turkey’s exports to Tanzania reached $100 Million in 2017. The agriculture and construction sectors are the main areas to be focused on.
The Republic of Tunisia is located in North Africa and it is bordered by Algeria and Libya. The population of Tunisia is 11 million and its GDP is $40 Billion. Tunisia is a member state of the United Nations, La Francophonie, the Union for the Mediterranean, the Common Market for Eastern and Southern Africa, the Arab Maghreb Union, the Arab League, the OIC, the Greater Arab Free Trade Area, the Community of Sahel-Saharan States, the African Union and the Non-Aligned Movement.
Tunisia gained independence from France in 1956 and republic was declared in 1957. Arabic is the official language, and French and Berber are widely spoken. Its capital city is Tunis with approximately 10 million population. The Tunisian Revolution in 2011 caused the economy to slow down, however the country maintained parliamentary system.
Tunisia’s main import and export partner is France. Italy and Germany have also strong commercial relations. Tunisia does not have rich mineral resources and its economy relies on machinery production and textiles industry.
Tunisia and Turkey have historical and cultural relations. Turkish companies have strong presence in Tunisia both in exports and foreign direct investments. For example, TAV Airports is entitled to operate Enfidha-Hammamet Airport in Tunisia until May 2047. There are als other notable construction and textiles companies in the region.
The Republic of Uganda is located in East-Central Africa and it is bordered by Kenya, South Sudan, Democratic Republic of Congo, Rwanda and Tanzania. The population of Uganda is 43 million and its GDP is $25 Billion.
Uganda gained independence from the United Kingdom in 1962 and the current constitution is effective since 1995. English and Swahili are the official languages. Its capital city is Kampala with a population of around 1.5 million people. The country has faced civil wars and conflicts since its independence. The current president came to power in 1986 after a guerilla war.
Uganda’s main import and export partners are China and the United Arab Emirates. Uganda also has strong commercial relations with its border countries. It exports 45% of its products to African countries. Uganda’s economy is driven by agriculture and gold mining. Coffee constitutes 20% of all exports, while gold constitutes 15%.
Turkish Embassy in Uganda was opened very recently in 2010. Since that time, the political and commercial relations developed quickly. Turkish companies have been looking for business opportunities in Uganda, and Turkish Exporters’ Assembly organized the Turkey-Uganda Businss Forum in 2017. Uganda is expected to extract petroleum in 2020 and Turkish companis can find opportunities in the machinery and construction sector.
The Republic of Zambia is located in South-Central Africa and it is bordered by Democratic Republic of Congo, Malawi, Mozambique, Zimbabwe, Botswana and Tanzania. The population of Zambia is 17 million and its GDP is $25 Billion.
Zambia gained independence from the United Kingdom in 1964 and the current constitution is effective since 2016. English is the official language. Its capital city is Lusaka with a population of around 2 million people. The headquarter of Common Market for Eastern and Southern Africa (COMESA) is located in Lusaka.
Zambia’s largest trade partners are Switzerland, China and South Africa. Zambia also has strong commercial relations with its border countries. It imports 58% of its products from other African countries. Zambia’s economy is driven by copper mining and processing. 74% of total exports is raw and refined copper.
Turkish Embassy in Zambia was opened very recently in 2011. Before the opening of embassy, Turkish embassies in Nairobi and Pretoria are accredited to Zambia. DEIK and Turkish Exporters’ Assembly are working closely with Zambian authorities to promote trade and investment between two countries. According to our research, construction sector has been developing rapidly in Zambia. Building and construction is the largest sector of Zambia comprising around 25% of the GDP and its growth rate is more than 10% each year. We advise Turkish companies to look for opportunities in contracting and construction materials.
The Republic of Zimbabwe is located in South Africa and it is bordered by South Africa, Botswana, Zambia and Mozambique. The population of Zimbabwe is 16 million and its GDP is $18 Billion.
Zimbabwe gained independence from the United Kingdom in 1965 and the current constitution is effective since 2013. English is the official language. Its capital city is Harare with a population of around 1.5 million people. Zimbabwe experienced hyperinflation in the 1990s and it does not have its own currency. Instead, they are using United States Dollar, South African Rand and other major currencies.
Zimbabwe’s largest trade partners are China and South Africa. Zimbabwe exports 44% of its products to China. On the other hand, 62% of its imports is from South Africa. Tobacco farming is an important driver of Zimbabwe’s economy. There are also precious metal resources such as diamonds and other mineral mines, such as chromium.
Turkey and Zimbabwe signed a memornadum of understanding in 2017 to deepen trade and investment relations. Turkey aims to improve its commercial relations with Africa and increase the share of Turkish companies on the African continent. The number of Turkish business councils with African countries has reached 41 by 2017. Zimbabwe is also one of the target countries for Turkish exporting companies.
Industry Analysis of African Countries
Agriculture is by far the single most important economic activity in Africa. It provides employment for about two-thirds of the continent’s working population and for each country contributes an average of 30 to 60% of GDP and about 30% of the value of exports. Still, arable land and land under permanent crops occupy only about 6% of Africa’s total land area.
Except for countries with sizable populations of European descent—such as South Africa, Zimbabwe, and Kenya—agriculture has been largely confined to subsistence farming and has been considerably dependent on the inefficient system of shifting cultivation.
Construction and Building Materials
Regionally, Africa became a major player in global construction past five years. There is a steady acceleration in construction activity especially in Nigeria over last 10 years.
Sub-Saharan Africa has the fastest growing construction industry among all major regions in the world over the next five years growing on average by a compound annual growth rate (CAGR) of 6.6% a year.
Africa construction market bears huge investment opportunities in energy and infrastructure, cheap labor, and a fast-growing consumer market.
Oil and Gas
Africa has considerable oil and gas resources that can help accelerate growth on the continent if used strategically. Although new resources are discovered progressively, they are not equally distributed. High and volatile oil prices are thus a challenge for all of Africa; they represent an opportunity to be pursued for exporting countries and an obstacle to be tackled for importing countries. Recent oil and gas discoveries coupled with regulatory changes and fast-growing energy demand from expanding local consumer markets offer significant opportunities across the continent
Africa’s oil and gas industry holds huge potential. At the end of 2017, Africa was estimated to have 487.7 tcf of proven gas reserves (7.1% of global proven reserves), whilst Africa’s proven reserves of oil are in the region of 125 billion bbl. Africa’s downstream sector has been fairly static in recent years with total refinery throughput hovering around 2.1 million bbl/d, however as we’ll see a wealth of new refinery upgrades or new builds is set to change this.
Once, East Africa was a world leader in cotton. Under British colonial rule, a system of poll taxes forced African farmers to meet specific quotas to satisfy the empire’s demands for textiles. The African textile industry is a varied one, but the seeming constant is their cotton market. There are many countries in Africa that currently grow and sell cotton. Six of them grow cotton under the label ”Cotton made by Africa”, which is one of the largest job producers as well, with 450,000 Africans working in the cotton business alone. Companies like H&M have opened mills in Africa, since their wages are less, and the population can support the workers needed. They also create products like thread and yarn for global markets from cotton grown and harvested in Africa.
The textile industry presents a lot of potential for value added benefits and job creation. It is estimated that up to 600% of value can be created along the cotton value chain: from cotton production, spinning and twisting into yarn, to weaving and knitting into fabric, followed by dying, printing and designing. The textile industry in Africa is estimated to grow at a CAGR of ~5% over the forecast period of 2019-2024.
Telecommunication and Internet
The African telecom sector is under a digital revolution. Since its liberalization in the 1980s, the involvement of multinational conglomerates has promoted a healthy competition which led to its flourishing. Most African states had long been resistant to liberalize their telecom markets but had to acknowledge that it was necessary to allow growth and expansion. Due to the deficiencies associated with the state-owned telecom enterprises, the African governments had to realize that only privatization would bring the much-needed financial discipline.
Among all other continents, Africa has been the fastest growing mobile market during the past five years, with more than 170 million mobile users. Mobile telephony has had a significant impact on economic growth, which in many African countries is twice as high as in developed countries. Moreover, mergers and acquisitions (M&A) activity in the technology and telecommunication sectors in Africa quadrupled in 2018, from 2017. M&A in the tech and telecoms sector in Africa and the Middle East was valued at US$1 .2 billion in 2017. This is predicted to increase to US$5.9 billion in 2018.
Transportation and Logistics
There were highly developed transport networks in many parts of Africa in precolonial times, and, during the colonial era that followed, these networks were restructured to penetrate into the interior from the seaports and, in the main, to serve the commercial and administrative needs of the colonial powers.
The emergence in the 1960s of independent African governments who recognized the need to lift economies from their generally very low levels and, above all, to develop agriculture and embark on industrialization heralded improvements in economic planning, the development of transport networks, and the introduction of cheaper freight rates.
The mineral industry of Africa is the largest mineral industries in the world. For many African countries, mineral exploration and production constitute significant parts of their economies and remain keys to economic growth. African mineral reserves rank first or second for bauxite, cobalt, diamonds, phosphate rocks, platinum-group metals (PGM) and vermiculite.
Metals exported from Africa include uranium, platinum, nickel, bauxite and cobalt. Two of the most profitable mineral exports are gold and diamonds. The continent can produce close to 500 tons of gold a year. Africa generally produces around half of the world’s diamonds, however this has increased in recent years to over 60%.
Utilities and Infrastructure
Africa faces a huge electricity demand challenge. Existing infrastructure is insufficient to meet current requirements, installed power capacity is expected to rise from 2012’s 90GW to 380GW in 2040 in sub-Saharan Africa. Nonetheless 530 million people, primarily in rural communities, are expected to remain without power. An era of rapid technological change is also coming at a pivotal time in the expansion of African power infrastructure.
Sub-Saharan African water utilities have been able to slowly improve water coverage , but overall piped water coverage stands at only 15 percent. Access to sewer services is in its infancy in Africa, with very few utilities providing such services. Africa needs $20 billion dollars for achieving the Water and Sanitation Sustainable Development Goals in 2030; that is three folds to current investment in the sector. Similarly, achieving universal access in electricity by 2030 will require annual investments of $1 billion a year at minimum.
Iron production was a particularly important precolonial African technology, with iron becoming a central component of socioeconomic life in many societies across the continent. The limitations to iron ore mining are not because of the size or grade of the ore, but rather the costs associated with mining the ore and transporting it. It is a capital intensive industry that requires significant investment in infrastructure. Around two billion metric tonnes of raw iron ore is produced every year. The international consumption of iron ore is growing by around 10% every year, and the main consumers are Japan, China, Korea, the European Union and the United States.
Iron is the main component of the steel production. Africa accounted for 1% of the world’s total finished steel production. Egypt and South Africa are the main players in steel production in Africa. Contrarily, Africa’s steel consumption is around two times higher than its production. Africa accounted for 2.2% of the world’s total finished steel consumption. South Africa has 77% of total iron production in Africa in 2016.
Africa, the largest continent, currently supplies the smallest proportion of global industrial roundwood 4% of any region. However, more than 70% of the population in Sub-Saharan Africa depends on forests and woodlands for its livelihood; one fifth of rural families’ daily needs come from forests. Also, Woodlands and forests supply approximately 60 percent of all energy. Forest-related activities accounts for a large part of the GDP of most of the continent’s countries.
Africa is home to 675 million hectares or 23% of the overall land area of the continent. In addition, there is an estimated 350 million hectares (13% of the land mass) of “other wooded land.” This is made up of wooded savannah, thickets and shrublands. There are huge volumes of wood contained in “trees outside forests,” which include trees and other woody plants in rural landscapes (farms, pastures, agroforestry and horticultural systems) as well as in urban settings, on private land, along roads, and not forgetting planted forests estimated at about 15 million hectares.
Africa’s banking sector looks promising for the future, Its markets are fast growing and nearly twice as profitable as the global average. Although competition is heightening and regulation is tightening, there is still much room to grow: Africa’s retail-banking penetration stands at just 38 percent of GDP, which is half the global average for emerging markets.
Africa today has the second-fastest-growing banking market -taking retail and wholesale banking together—in the world. Between 2012 and 2017, African banking-revenue pools grew at a compound annual growth rate of 11%. Africa is also the global banking industry’s second-most profitable region: the Return on Equity(ROE) of its banks in 2017 stood at 14.9 percent, second only to Latin America and comparable to other regions such as emerging Asia and the Middle East.
Shipping and Ports
Africa’s minimal integration in world trade is reflected in the contours of its maritime sector yet this portends an enormous opportunity for the world’s youngest and second-most populous continent. The Sub-Saharan African container port system in general remains underdeveloped in comparison to other port systems around the world. Still, maritime shipping is the lifeblood of Africa, with over 90% of the continent’s imports and exports transported by sea. Africa relies heavily on ships and ports to service its intercontinental trade.
While it accounts for approximately 2.7% of global trade by value, the continent contributes higher shares to global seaborne trade 7% and 5% of maritime exports and imports by volume, respectively. While one-third of African countries are landlocked, maritime transport remains the main gateway to the global marketplace. Africa still has problems with its ports from capacity issues to inefficient handling time, poor security and in some places, corruption.
African continent could be the place in the coming years. With a rich source of available raw materials coupled with rising demand from the increasing population and growing income levels, Africa could be an interesting place for chemical companies to explore for growth and investment. Clearly there are challenges to overcome; political instability; complex demographics; unstable energy supply and poor infrastructure; but it is clear that these are starting to diminish in some countries. Indeed, the chemical industry could play a role in helping to overcome some of these challenges.
Food and Beverage
Africa’s food production is solely based on raw consumables and Africa needs to invest more in value-added processing units and branded food products. Basic agricultural production still accounts for more than 60% of the entire value chain, compared to 22% globally. New innovations in the food industry, one of the world’s oldest and largest industries, are creating attractive opportunities for women and youth on the African continent. As on other continents, the agri-food industry in Africa plays a fundamental role in the creation of income and employment opportunities.
African countries offer important economic opportunities for Turkish exporters and investors who are willing to increase their revenues in a profitable way. However, the risks and business landscape of each country should be carefully identified. In this report, we presented the economic background of 20 African countries and their economic relations with Turkey. There have been significant investments in certain African countries for a long time, such as Egypt and Sudan. On the other hand, Turkish relations with some African countries improved significantly in the last years, such as Senegal and Ghana. In Senegal, Turkish exports increased from $108 Million to $257 Million in only 10 years.
It is very important for African countries and Turkey to improve trade volumes. Turkish Government has had a significant initiative to build Turkish presence in major African countries. The number of Turkish embassies in Africa has more than tripled, from 12 to 41, in the last 15 years. There have been joint business forums and conferences, where companies from different countries found the opportunity to take the first commercial steps. Istanbul Africa Trade Company is a private initiative with a mission of improving trade relationships between Turkey and African countries.
Before making investments or shipping products, we advise our clients to:
- Understand the local business law
- Conduct counterparty research
- Analyze country-specific risks
- Work with credible financial institutions
According to the analysis of Lagos Chamber of Commerce and Industry (LCCI), The Nigerian economy is currently losing approximately $1.6 Billion in customs revenue. There have been many unpleasant incidents for inexperienced investors due to corruption and fraud.
Istanbul Africa Trade Company is a reliable partner for your company in the African markets. Istanbul Africa Trade Company:
- has well-established partnerships in major African countries
- provides its clients with business and risk analysis of target countries
- promotes your company and products in African business councils
- only works with accredited financial institutions
- offers trade solutions at every process
- and develops a collaborative relationship with its clients.
For your business inquiries, you can reach our headquarters in Turkey, and our regional partners in Ghana and Zimbabwe. We hope that you found this report useful for your business goals.