Turkey’s biggest advantage in Africa is its reputation: DEİK chair
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Turkey’s reputation in Africa as a business partner creating a win-win habitat is its biggest advantage for doing business on the continent when compared to other investor countries, according to Nail Olpak, head of Turkey’s Foreign Economic Relations Board (DEİK).
“In trade, your biggest capital is actually your reputation. You can make big profits but you can waste it very quickly,” Olpak told Hürriyet Daily News, only days after the Turkey-Africa Economic and Business Forum held on Oct. 10 and Oct. 11 in Istanbul.
“Some [African countries] have suffered since the old colonial days. For others, what currently happens is they come with the power of their capital and tell them, ‘I will build your infrastructure but will get all the resources in this location,’” he said.
Olpak also praised Turkey’s “trade diplomacy” and government support to investors in boosting economic ties with Africa.
How do you position Africa’s place in Turkey’s trade profile?
We are not where we should be. In 1990, a Swiss businessman had proposed to do a joint production with me in Nigeria. I could not risk it at that time, even though the businessman had been present in Nigeria since the 1960s.
Compared to the French and the British, we started later but we have gained speedy momentum. We have been showing intense interest, especially in the past decade.
Previously, we used to be more present in the Maghreb region between Egypt and Morocco. Today, we have a $20.6 billion trade volume with the whole continent. We have a $3 billion surplus.
What is Turkey’s business model for entering the market in Africa?
In order to expand, we needed some infrastructure and this partially has to do with politics. In some cases, you need political will to open the way for you.
We have trade offices in 26 countries and we have 43 business councils. We have just set up the 44th.
Turkish Airlines flies to 51 destinations in 36 countries. This is important because it is easier to do business with a place where it is easy to come and go. We have the Turkish Cooperation and Coordination Agency (TİKA), the Red Crescent (Kızılay) and the Maarif Foundation also leading the way.
So, there is an integrated approach?
With 43 out of 144, the highest number of business councils is in Africa and this in itself sends a message.
Africa’s share in world trade is 2.6 percent. Yet, we are talking about a continent with incredible resources.
It has tremendous potential and we have to help Africa.
Turkey’s share in Africa’s global trade is 2.1 percent. You can read this two ways: You can say this is bad and there is not much else left to do here, or you can say there is still a long way to go.
We, as businesspeople, prefer to look at it from the second point of view and think there is a lot of potential to use.
Will Turkey continue with the same business model, or will you shift to another stage?
We are confident we have the right business model. There are areas governments can help the business community. Turkey was not that ready to do that in the past. So, it is important the government helps our businesspeople who are active in Africa. Restoration work with TİKA and assistance no matter how small brought by the Red Crescent contributes to your positive perception. Turkish Airlines also improves this image.
Another dimension is finance. We could do more in terms of investment and construction. But that depends on the country’s financial abilities.
In the first instance, we have the Eximbank, which plays an active role. I am also a board member of Eximbank. I hope we can generate the necessary capital flow to Eximbank and that could open more of the way in front of our investors and exporters.
Businesspeople saw that if they are physically present in Africa, they can do business. They also saw that profit margins are bigger compared to other more established countries, even if this entails more risks. In countries with a longer tradition of doing business with well-established institutions like in central Europe, competition is tougher and profit margins are lower.
Turkish entrepreneurs are courageous. But we are not talking about doing business from far away with a remote control. If you want to do business, you have to go to Ethiopia; you will work with local branches but you need to have someone from Turkey whom you trust there too. Turkish businesspeople have seen that they can get results in Africa.
We saw tremendous interest during the Africa forum. Just as we were thinking whether the forum would be limited to a one day opening event, talks between some companies kept going for the following three days.
What do you think is Turkey’s biggest advantage in Africa?
It is its reputation. In trade, your biggest capital is actually your reputation. You can make big profit but you can also waste it very quickly.
Reputation takes a long time to build and also takes a long time to lose.
I travel extensively in Africa and this is what they tell me: Everyone comes here to make money and that is normal. Your difference is that you are providing an atmosphere that makes us win as well.
Some have suffered from the old colonial days. For others, what is currently happening is that some come with the power of their capital, tell them they will build their infrastructure but will find all resources in this location. A somehow cruel attitude seems to continue.
Another advantage of ours is our wide trade diplomacy, the presence of embassies, business councils, Turkish Airlines etc. Our third advantage is government support behind businesspeople.
And we need to complement all this with finance.
At this point, let me add that banks, especially public banks, have a role to play in terms of opening branches (in Africa). It is important because it eliminates another intermediary and that brings down our costs and gives us speed.
Can you elaborate on what terms you provide Africa with a better business atmosphere?
It relates to your warmth and your perspective. There are certain countries in Europe which have seen this and they say let’s do it together in third countries. Among them is Hungary, where a state visit recently took place, but also France, with which we have met specifically to talk about this field.
We can name other countries. If a proposal comes from them, it means they realize you are beginning to take a prominent position. Otherwise, why would they want to do something they can do on their own? But there is a positive attitude; a belief in the dynamism to do it together.
How does Turkey’s approach become a win-win and benefit the Africans exactly?
We are more ready to share. We share our profit. If there is a profit we are ready to share it in a fair way with the African country or company. It appears our competitors are not as generous as we are in terms of sharing.
Foreign observers used to ask me what Turkey is doing in Africa. Were they suspicious of Turkey’s aims?
Rather than suspicion, I think they are saying, “We are already there, why are they [Turks] coming? They [Turks] want a share of the pie.”
At one point, they were even saying, “What business do they have here? We should be on our own.” Now, they saw they are not alone there and at any rate, Turkey does not want to be alone there either.
WHO IS NAİL OLPAK?
Nail Olpak was born in 1961 in İbecik, Burdur. He has graduated from Aydın High School. He holds a degree in Mechanical Engineering from Istanbul Technical University (İTÜ) and has completed his postgraduate education in the field of energy at Yıldız Technical University (YTÜ).
He began his professional career at Umar Makina AS and went on to hold the position of vice factory manager at Özgün AS. After becoming a project manager at Esem Elektrik AS, which is a subsidiary enterprise of Cankurtaran Holding, Olpak worked as senior executive for various managerial levels and took over the vice presidency until he left the group.
Olpak has established his own businesses, NORA Elektrik AS, PAK YATIRIM AS and OMN Inşaat AS. He still holds the position of board chair of the two companies and board member of the third company, respectively.
He has served as chair of the Independent Industrialists and Businessmen’s Association (MÜSİAD) and council member of the B20 Steering Committee of Turkey.
Olpak is married and has two sons, one who is an architect and one who is a mechatronic engineer.