Turkish construction companies are thriving in Africa

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SELIM BORA has come a long way. In March, his company Summa was awarded the contract to rebuild and operate Guinea-Bissau’s new international airport. Months earlier, it had completed a 50,000-seat national stadium in Senegal in less than 18 months of construction — a sprint-like pace for such projects. Convention centers in the Democratic Republic of the Congo and Equatorial Guinea, a sports arena in Rwanda and airports in Niger, Senegal and Sierra Leone are also part of the company’s resume. “Ten years ago we didn’t have any projects in Africa outside of Libya,” recalls Mr. Bora, looking out from his office in Istanbul. “Today, 99% of our work takes place in Africa.”

The Turkish construction industry is an international heavyweight. Of the 250 largest construction companies in the world, 40 are Turkish, behind only China and America. Many have long had a large footprint in North Africa. Recently they have started to gain a foothold in the south of the continent. Last year alone, the value of projects completed by Turkish developers in sub-Saharan Africa was US$5 billion, or 17% of all Turkish construction projects abroad, up from a meager 0.3% before 2008. The region has Europe (10%) and the US overtakes the Middle East (13%) and is only surpassed by the countries of the former Soviet Union. In parts of Africa, the Turks are even competing with Chinese builders, who continue to dominate construction in Africa.

Many of Turkey’s construction firms got their African start in Libya in the 2000s, where they signed billion-dollar contracts. The fall of dictator Muammar Gaddafi in 2011 and the ensuing civil war forced them to flee. They found new opportunities south of the Sahara, where their reputation regularly preceded them: many African leaders who had visited Libya and admired Turkish projects there were eager to work with the companies responsible for them.

Some support for Turkish projects comes from Turkey’s Export Credit Bank and public lenders from Japan. Both countries are eager to examine Chinese interests in Africa for their own strategic reasons. Nevertheless, the Turks admit that they can hardly keep up with the Chinese competition in terms of price. “We can’t compete with the Chinese because they come with their own funding and we have to go to the markets,” says Basar Arioglu, chairman of Yapi Merkezi, another major construction company.

The Turkish companies therefore emphasize other sales arguments instead. They tend to work faster than Chinese competitors and offer superior quality. After completing a major railway project in Ethiopia a few years ago, Yapi Merkezi recently beat Chinese rivals in building the first section of a Tanzanian railway linking Dar es Salaam and Lake Victoria. In December, it signed a $1.9 billion contract to build the third section.

The Turks are also happy to comply with requests from African governments to hire local subcontractors and workers, which the Chinese are more reluctant to do. To a large extent, a virtue is made out of necessity: while Chinese companies can afford to bring their own specialists, including engineers, to Africa, Turkish companies often cannot afford it. As Turkey lacks the resources of China to be in all places at once, Mr. Arioglu notes, “The only way we can survive in the long run is to go local in all the countries we work in.” As Summa in the 2010s, his work in Senegal, 70% of the workforce was Turkish, Mr. Bora recalls. That number has now dropped to 30%.

Some Africans still grumble about the Turkish presence in their countries. Like the Chinese, one official complains, they “come and go,” creating only fleeting jobs. Another complains that Turks (and other newcomers) prefer to invest in construction, mining and ports rather than higher up the value chain, which would mean more for Africa’s economic development in general. And they could set up more joint ventures with African companies.

However, such complaints are offset by a final consideration increasingly valued by African governments. “We came at a fortunate time,” recalls Mr. Arioglu, “when both Ethiopia and Tanzania were looking for alternatives to Chinese companies.” with which China’s builders cannot keep up.

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