New commercial conjunctures in Africa and increasing Turkey trend

For many years, I have been traveling the whole African continent from east to west due to my business trips. Africa is kind of my home now, where I earn my life. Every country, every region, even every city has different habits and different preferences. It is quite possible to see a wide variety of mentalities and approaches, especially in terms of business trends and commercial preferences.

If we want to examine trade from different angles, my personal opinion is that trade is divided into two in the African continent.

1 – Traditional Channel

2 – Modern Channel

Especially with the digital transformation projects that have increased their activities since 2020, many African countries have started to move their trade from the traditional model to modern methods. According to my observations, African countries such as South Africa, Botswana, Nigeria, Kenya and Egypt have increased their adaptations in this regard by adopting modern trade principles. Today, while it is possible to see global supermarket chains and moto courier going to every corner on the streets of Johannesburg, Lagos or Nairobi, however we can see that most of the countries in Sub-Saharan Africa have a very long way to go in this regard. In contrast, countries that are in the process of transitioning from traditional trade to modern trade are Botswana, Uganda, Tanzania, Ghana, Ivory Coast and Senegal. Digitization movements continue rapidly in these countries, but they are still in the middle of the road. Of course, all of the commercial transactions I mentioned above are valid for retail sales.

Let’s come to the commercial area where the actual turnovers and figures are made: Import – Export. The African continent, especially the Sub-Saharan geography, has become one of the most popular export destinations in recent times. The African continent stands out as a shining star in intercontinental journeys, which have become more accessible by globalizing with technological innovations. Especially with the effect of the post-Covid period and the Russian-Ukrainian war, very serious defects and difficulties have emerged in the international trade routes. So what are they?

– Increase in raw material prices

– Increase in oil prices

– Negative effect of energy prices on unit prices

– Almost zero Euro & Dollar parity

– Salaries of African minimum wage workers remain constant

– Increase in prices of all product groups and decrease in purchasing power despite fixed salaries

With all these difficulties, Turkey has emerged as an important business partner for African countries whose economy is mostly based on imports. In recent years, Turkish origin products have started to find themselves more and more in African markets, both with their product quality and their approach to the customer. As you know, European and Far Eastern producers were most affected by these economic turbulence periods. The fact that the inflation figures in Europe reached the peak of the last decades and the high container prices in the Far East enabled Africa to turn its import route to Turkey.

The clearest thing that confirms my personal thesis is the positive increase in Turkey’s export data to the African continent. When we look at the total export figures of the 1st and 2nd quarters of 2022, we see that Turkey made a 33.4% jump in the African export figures. This figure, which was 8.99 Billion Dollars as of the first 6 months of 2021, reached the level of 12 Billion Dollars as of the first 6 months of 2022. These figures are an important indicator that Turkey has taken market shares from manufacturers from Europe and the Far East.

The same situation is seen even more clearly for the Botswana market. Turkey, which increased its exports to Botswana by 253% compared to the 6th month of the previous year, has taken an important step towards becoming an important commercial partner for this country as well.

As I mentioned in the paragraphs above, I spend approximately 10-12 days a month in a different country on the African continent. While visiting the wholesale market and markets, the recent increase in Turkish products draws my attention to a great extent and I am proud of it.

Another thing that has caught my attention lately is not the increase in the import-export volume between Turkey and Africa, but many Turkish investors have started localization movements in Africa by opening production facilities or representative offices in various parts of Africa. While construction projects were mostly given to Far Eastern companies in the past, the number of Turkish subsidiaries has started to increase recently.

As the world gets smaller and digital transformation increases, we will witness that the commercial contracts of more Turkey and Africa will increase even more.