A groundbreaking pan-African trade pact will open new doors for Turkish investors on the continent, according to business leaders working to forge stronger trade ties.
Ebubekir Salim, the head of Turkey's Independent Industrialists and Businessmen's Association (MÜSİAD) branch in South Africa, told Anadolu Agency (AA) the African Continental Free Trade Area (AfCFTA) would provide "huge support" for Turkish businesses.
The AfCFTA came into force on Thursday after the requisite quorum of 24 countries deposited their ratification instruments. With an expected market of $3 trillion, encompassing a population of 1.2 billion people, the deal will make Africa, the largest free trade area in terms of geographical area and the number of countries involved. The FTA will enable Turkish investors active in Africa to get a bigger slice of the market and make them more competitive, he said. "Turkish business circles have to form their strategies and should decide what to manufacture or export to Africa," Salim said.
More production facilities will move to Africa from Asian countries such as China and Japan. "They will utilize the FTA. So Turkey should study Africa better," he said. Salim said the share of intra-African trade is lower than for other country groups, Asian and Latin American countries. He blames weak infrastructure and "most importantly" trade barriers.
"Trade regulations and tariffs keep intra-African trade quite low, so countries needed to find a way to remove obstacles," Salim said.
He underlined the FTA would be especially beneficial for the most developed countries in Africa such as South Africa, Nigeria, Morocco and Algeria. "As they have much better financial positions and infrastructure. Thus, they produce more goods and export them," Salim said.
He added the deal is expected to be fully implemented by 2030 and the structure will be complemented within four years.
Turkey's improving relations with African countries have also been reflected in the growing trade volume. Between 2009 and 2018, bilateral trade volume between Turkey and the African continent stood at $179 billion. In the last decade, the export of Turkish products was valued at $121 billion while imports totaled $58 billion. The declaration of 2005 as the Year of Africa has given significant momentum to political and commercial relations between Turkey and countries on the continent. Tamer Taşkın, head of the Foreign Economic Relations Board's (DEİK) Africa Business Council, said the deal would attract more foreign investors to the continent. "When Turkish investors, with their experience and know-how, launch business in an African country, they will have the advantage of selling goods they produce on the continent without tariffs," Taşkın said. Investors active in Africa will be more advantageous than newcomers, he said. "For example Turkish household appliances firm Beko manufacturing in South Africa will have a chance of a lifetime to sell to the whole continent without tariffs, while it was only valid for the southern part of Africa," he added.
The AfCFTA will progressively remove tariffs on intra-African trade. The agreement is expected to boost intra-Africa trade by 53% once its implemented, according to the African Union.