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China’s outright dominance of Africa’s infrastructure sector is under threat as Turkish construction firms begin to make inroads on the continent to deliver large-scale projects on budget and on time
Nairobi, Kenya | BIRD AGENCY – Seth Onyango | Turkish construction firms are closing in on their Chinese counterparts in Africa’s lucrative infrastructure sector, providing a much-needed diversification of investment sources for African states.
This comes even as the World Bank revealed the demand for infrastructure spending will reach an unprecedented US$300 billion per annum by 2040, driven by the rapid growth of Africa’s population and urbanisation.
Some contracts previously awarded to Chinese firms are falling to the Turkish workbench as Beijing, although still unrivalled in this sector, begins to cede ground to new challengers.
The much-anticipated 273 km standard gauge railway line linking Kampala and Malaba, off the Kenyan border, will now be built by a Turkish firm, Yapi Merkezi.
China Harbour Engineering Company, a Chinese state-run firm, was initially awarded the bids in 2015. But after eight years of inaction, the Ugandan government reassigned the project to Yapi Merkezi.
This is emblematic of a growing trend in which Turkish firms are increasingly outmanoeuvring their Chinese counterparts in the fiercely competitive African infrastructure sector.
In 2019, Turkish multinational Summa bested Chinese competitors to secure contracts to build a parliament building and shopping mall as well as a convention centre in Equatorial Guinea, Rwanda, and Ethiopia, respectively, according to Middle East Eye’s latest analysis.
Yapi Merkezi also won a bid in Ethiopia to build one of the country’s most modern train lines in 2017. In 2021, they outbid a Chinese competitor in Tanzania to secure a $900m railway project.
According to analysis from the Middle East Eye, despite China’s significant financial advantage, these successes indicate that while Turkey may still need to be a fully-fledged rival in Africa, they are quickly closing in and posing a formidable challenge to China’s dominance in the region.
Turkey has been making strategic inroads into the African market for decades, starting with the Africa Action Plan of 1998, which aimed to foster continent-wide bilateral relations. The efforts were ramped up under President Recep Tayyip Erdogan’s administration, which has directed substantial economic and diplomatic investments towards the African continent.
In 2008, the African Union designated Turkey as a strategic partner. The country leveraged its Ottoman legacy to assert its non-colonial presence and commitment to responsible resource management in Africa.
These efforts have culminated in the launch of two additional policies, the Africa Opening in 2008 and Africa Partnership in 2013, solidifying Turkey’s prominent presence on the African continent.
“Erdogan has even described Turkey as an ‘Afro-Eurasian’ country,” the Middle East Eye notes.
Tellingly, Turkish embassies on the continent have increased from only a dozen in 2002 to 43 and counting, with Turkish Airlines now flying to 61 destinations across the continent.
In the early 1990s, American and European corporations held a significant advantage in the African construction market, accounting for over 85% of all contracts. At that time, Chinese firms were not even considered viable options.
However, the tide has shifted, and Western companies are now facing significant challenges in keeping pace with the rapidly expanding market.
Chinese firms have emerged as the clear leaders in this arena, holding an influential position in the infrastructure projects sector as Deloitte, a consultancy firm, reported that in 2020, Chinese firms were accountable for 31% of all infrastructure projects with a value of US$50 million or more, compared to a mere 12% in 2013.
Conversely, Western firms have seen a marked decrease in their presence, accounting for only 12% of these projects, compared to 37% in 2013.
But just like China over the past decade or so managed to edge out most of the competition, Turkey has arrived with only Chinese firms competing with each other.
Although Ankara does not match Beijing’s financial firepower, its strategy is to win small, remain under the radar and then win more.
Turkey has long had a strong presence in Africa, with the Turkish Cooperation and Coordination Agency (TIKA) establishing 22 offices and the Maarif Foundation operating 175 schools in 26 countries.
This has led to a proliferation of Turkish construction projects. The Turkish Contractors Association reports that Turkish construction firms currently account for 17.8% of international construction business in Africa, with projects exceeding US$77bn.
Turkey’s economic relations with African nations have seen a marked improvement in recent years, as evidenced by the country’s trade volume with African countries, which has risen from $5.4 billion in 2003 to $34.5 billion in 2021.
Leading Turkish construction companies, such as Istanbul-based Yapi Merkezi, have been involved in projects across the continent, building houses, stadiums, convention centres, hospitals, shopping malls, and embassies, all with a distinct Ottoman or Seljuq architectural style.
Another leading Turkish firm, Summa Construction, has contributed substantially to the African construction industry, constructing the Dakar Arena, Dakar International Conference Center, Blaise Diagne International Airport, and Niamey Airport.
On the other hand, China’s trade relation with Africa is enormous, with its foreign direct investment on the continent jumping 8757% from $490 million in 2003 to $43.4 billion in 2020, with trade volume between the two peaking at $254 billion in 2021. China now accounts for 16% of Africa’s total manufacturing imports.
Despite Beijing’s leverage, Turkey’s charm offensive in Africa shows that smaller states can upset their deep-pocketed counterparts and inject competition that brings down the cost of contraction.
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Source: Bird story agency
