Econostrum | Economic News in the Mediterranean

Turkey strengthens its investments in Algeria

Written by Frédéric Dubessy on Thursday, April 21st 2022 à 10:45 | Read 1544 times

Mahinur Ozdemir Goktas and Erhan Cecen are considering increasing Turkish investments in Algeria (photo: Musiad)
Mahinur Ozdemir Goktas and Erhan Cecen are considering increasing Turkish investments in Algeria (photo: Musiad)
ALGERIA / TURKEY. Turkish direct investments are accelerating in Algeria. According to Mahinur Ozdemir Goktas, they have reached $5 billion (compared to $13.5 billion for China). Invited by Musiad-Algeria, the Association of Independent Industrialists and Businessmen, and the World Turkish Business Council (DTIK Algeria), the Turkish ambassador to Algeria indicated that in 2000, only seven Turkish companies were present in this country. "Today, Algeria has become the seventh most invested country in the world, and the first in Africa. The number of Turkish companies currently present in Algeria has reached 1,400," says Mahinur Ozdemir Goktas. In 2020, despite the pandemic, more than 130 Turkish companies were created in Algeria.

These $5 billion of investments would have generated some 30,000 jobs. They concern very diverse sectors described by the Turkish ambassador as "strategic and priority" for Turkey. Erhan Cecen, Secretary General of Musiad-Algeria, notes "the success of several Turkish companies in Algeria in various fields, which encourages their fellow citizens to come and support them in the battle of production. He called on Turkish investors to strengthen their presence in Algeria, especially in production. Okay Tosyali, representative of the World Turkish Business Council in Algiers, also called on Turkish companies and "those with a friendly relationship with Turkey to come and invest in Algeria, especially in the productive sectors." He envisages "much higher" investment volumes in the future, notably in the health, tourism, industry and renewable energy sectors.

A trade balance surplus for Algeria

"Algeria has shown particular interest in developing economic relations with Turkey," said Okay Tosyali. His eponymous group is working on a flat steel production project in Oran. Aimed at exporting to the European, American and Turkish markets, this unit should be operational by the end of 2023 after an investment of $1.7 billion. A space will be dedicated in the port of Arzew to this production.

Turkish companies will also participate in an agricultural project in the wilaya of Adrar with an investment of $20m in milk production and wheat cultivation to satisfy local needs. Another project is underway in the textile sector in Sidi Khettab (wilaya of Relizane, 135 km east of Oran). The Turkish group Tayal wants to launch a local production of cotton there.

If Turkish companies remain very active in the production of textiles and leather in partnership with Algerian public companies, the most important Turkish investments in Algeria are today in the steel industry. The DTIK representative estimates that steel exports could reach $2 billion per year by 2025.

Musiad has been operating in Algeria for three years and claims 150 members, both Turkish and Algerian businessmen.

In 2020, according to Algerian Customs statistics, Turkey was Algeria's fourth largest customer with imports worth a total of $2.1 billion, mainly in LNG gas. It is positioned behind Italy, France and Spain. In the same year, Turkey was among Algeria's top ten suppliers with exports worth $1.5 billion. The trade balance is therefore in surplus in favour of Algeria, to the value of $600 million.

The long march towards an economic partnership between Algeria and Turkey.

In 2006, the signing of a Treaty of Friendship and Cooperation between Turkey and Algeria served as a basis for increasing relations between the two countries, particularly trade.

A visit to Turkey at the end of November 2014 by Recep Tayyip Erdogan on the occasion of the Algerian-Turkish Businessmen's Economic Forum provided an opportunity to take stock of the business flows between the two countries. At the time, the Turkish authorities and business leaders complained to the Turkish president that Algeria is only a market for Turkey and called for going beyond this stage to the formation of industrial joint ventures capable of ensuring a technology transfer to the industrial sector.

The projects mentioned in 2022 were already in place...

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