PULE ISAAC MALEFANE
“South Africa is Turkey’s Leading Trade Partner in Sub-Saharan Africa”
South African Ambassador to Turkey Isaac Malefane, speaking in an interview with Démarche at his residence in Ankara, elaborated on the economic and political relations between the two countries. On the issue of investment opportunities between South Africa and Turkey, he said: “As the largest economy in its region, South Africa accounts for around 40 percent of Turkey’s trade in Sub-Saharan Africa, and our combined trade volume stands at approximately 1.4 billion USD. This does not reflect the potential for trade in the two economies, which have much to offer each other, being resource rich in various ways.”
By M. Ferhat YÜKSEL – Photographs Gökhan BAŞARA
WE SHOULD CREATE PUBLIC AWARENESS
What are your priorities as Ambassador to Turkey? What do you hope to accomplish during your time here?
Relations between South Africa and Turkey are at a high level, and while they are getting stronger day by-day, our greatest challenge is to increase trade and investment between our two countries, which currently does not reflect the high level of our political relations or our economic potential. Raising public awareness of the opportunities in both countries for business and tourism needs to be focused upon more strenuously.
South Africa and Turkey recently held a successful Joint Economic Commission in South Africa, and we look forward to strengthening our existing economic relations through this ambitious legal instrument, particularly in the infrastructure development, agriculture, mining and energy, and the precious stones and jewelry manufacturing sectors.
In essence, my two main priorities are increasing bilateral trade between our two countries while building on our people-to-people relations through mutually beneficial engagements.
How do you evaluate Turkey’s increasing activities in the African region, especially in recent years?
Turkey, through its Foreign Policy, has come to Africa as a partner who supports, strengthens and works together with African countries on focused developmental projects. In short, this is a partnership that has proven to be beneficial to African countries, particularly in its hosting of students on Turkish government scholarships.
Turkey was accepted as an observer country in the African Union, and hosted a meeting of the heads of state of African countries in Istanbul; and the fact that Turkish Airlines has 49 direct flights to capital cities in Africa is a clear indicator of the rapidly developing relations between Africa and Turkey.
Great strides have been made in the establishment of a legal framework in support of our economic, commercial and cultural relations, and in the opening of new diplomatic missions in African countries, the paying of mutual visits, the establishment of contacts at all levels, the creation of cooperation mechanisms and the signing of necessary agreements. Humanitarian aid programs and assistance programs aimed at economic development have also been launched, while efforts have also been made to promote cultural relations and to increase contributions in the field of education. In short Turkey’s efforts on the African Continent are significant and much needed.
LEADING BUSINESS PARTNER FOR TURKEY
How would you describe the bilateral relations between the two countries? Which areas do you consider to be most promising for the intensification of bilateral cooperation?
Bilateral relations between our countries are long-standing, having been established in 1993 when Turkey opened its Embassy in Pretoria, after which South Africa opened its Embassy in Ankara in 1994. Honorary Consulates are also utilized to strengthen our partnership.
South Africa is Turkey’s leading trade partner in Sub-Saharan Africa, and Turkey’s trade with South Africa, generates more than 30 percent of the GDP of all Sub-Saharan African countries. As the largest economy in its region, South Africa accounts for around 40 percent of Turkey’s trade in Sub-Saharan Africa, and our combined trade volume stands at approximately 1.4 billion USD. That said, this does not reflect the potential for trade in two economies, which have much to off er each other, being resource rich in various ways.
DIRECT FLIGHTS INCREASED
Approximately 70 Turkish companies operate in South Africa with an investment value of more than US$500 million, mostly in the mining and textile sectors. Moreover, there are many Turkish companies, especially in Cape Town and Johannesburg, engaged in retail and wholesale, as well as in the import of textiles, carpets and food products. The number of Turkish citizens that are resident in South Africa is estimated to be around 3,000, and the exchange of people traffic between Turkey and South Africa has increased considerably since Turkish Airlines launched its İstanbul-Johannesburg-Cape Town service on September 17, 2007. Since then, Turkish Airlines has also started direct flights to Cape Town (in October 2015) and to Durban (in November 2015).
South Africa’s Department of Trade and Industry has identified 40 priority projects that may be of interest to Turkish business in a number of different sectors, including agriculture, construction, energy, infrastructure and water, among others. We would encourage Turkish business to contact us for further information on these projects.
What are the largest trade and investment areas between Turkey and South Africa?
The best opportunities for Turkish businessmen in South Africa can be found in the energy sector, (particularly renewable energies), automotive component manufacturing, agriculture, tourism, and infrastructure and construction. South Africa has a very diverse economy with many different sectors, but we feel that it is these sectors that would best suit Turkish businesses due to the skills and experience that we have seen displayed by the entrepreneurs here.
COMPLIMENTARY ECONOMIES
South Africa and Turkey are two complementary economies, in that both have progressed in the automotive, agriculture, coal, energy, and textile and energy generation sectors. In the energy sector, South Africa is exporting coal to Turkey and other parts of the world, and was also one of the first 10 countries in the region to consider solar energy. Wind, biomass and hydroelectric power are other areas in which we are developing projects, and we are working with two Turkish firms in the Biofuels area.
Undoubtedly, the fastest growing sector is tourism, which provides jobs for many people. South Africa has been an active participant at the East Mediterranean International Travel and Tourism exhibition (EMITT) for more than 20 years, and has prioritized Travel Turkey to raise awareness among Turkish people of South Africa’s attraction as a tourist destination. South Africa’s heritage sites, for example, should be of interest to Turkish travelers, given Turkey’s own cultural history. We are also actively developing our blue/maritime economy, and there are many opportunities in this sector, particularly since Turkey is itself a maritime power.
“BUSINESS LOVES STABILITY”
How do you view the political and economic stability of South Africa as an investment opportunity for Turkish companies?
It is said that “business loves stability”, and South Africa is a dynamic society on a dynamic continent. Turkish businessmen are well aware of this, and are able to adapt to such dynamism, coming with the experience of working in a region with high political instability. South Africa is not only developing by itself but is also an intricate part of the African continent with involvement in regional blocs such as SADC and COMESA. It is becoming apparent that Africa is the next growth frontier, with countries having GDP rates of 7 percent and more, and South Africa is the most developed economy in Africa, offering many opportunities for not only Turkish companies, I might add, but companies from other countries as well.
What is South Africa doing to attract Foreign Direct Investment (FDI)?
South Africa offers attractive tax incentives and government assistance to companies investing in the country, and there are a number of sectors in which the incentives are focused, including manufacturing, tourism, critical infrastructure, automotive and industrial innovation, among others. The South African Embassy has to date signed Memorandum of Understanding with the Chambers of Commerce and Industry of Mersin, Bursa, Antalya, Adana and İzmir to provide a framework for the development of trade and investment relations with Turkey. We have noted that Turkey’s chambers and industrial zones are very effective in developing economic relations, and we will be taking these relations forward through exchanges of business delegations to our respective countries.
JOINT MANUFACTURING PROPOSAL
In which sectors do you think Turkey and South Africa could cooperate best?
The renewable energy, construction, agriculture, textile, tourism, automotive, machinery, mining, forestry, furniture, jewelry and IT sectors in particular off er more opportunities for mutual investment. In these sectors we are progressing according to the protocol signed as part of the Joint Economic Commission with Turkey. Turkey’s overall perspective of Africa is based mostly upon exports, but this approach does not help the African economy to develop. What is important to us is production, and we are urging Turkey to manufacture together with us.
South Africa is a country of large-, medium- and small-sized firms, and investments should be made in joint ventures that can benefit both the investor and small-scale companies in order to strengthen them and thus grow the market for the benefit of both partners.
How can Turkey benefit from South Africa? How can South Africa benefit from Turkey?
Relations should be developed in which both countries and their people benefit from each other. In this interdependent and globalized world it is no longer possible for good relations to develop where only one partner benefits. Mutual trade and investment and mutual people-to-people exchanges that raise awareness of each other’s countries, cultures and people will greatly enrich and benefit us both.
ADVANTAGE IN THE EXCHANGE RATE
Both Turkey and South Africa have vivid tourism sectors, but bilateral tourism numbers and tourism in general between the two countries is weak. Do you think tourism may be a good field for exploration by both countries?
It has been proven by the World Tourism Organization that tourism is one of the greatest multipliers in terms of both employment and revenue, and so we must focus more on developing this sector. South Africa has a highly regarded and well developed hospitality sector, as does Turkey, and closer cooperation between our two airlines will encourage movements of people between our countries. Turkey has a large advantage over, for example, Europe or the United States due to the exchange rate and value for money, for both South Africans and Turks alike, and this factor needs to be given more prominence if we are to attract tourists to our respective countries. Furthermore the countries are in opposite seasons, so there is no reason why “summer holidays should ever stop”.
South African Tourism recently appointed a manager for Turkey who is planning to conduct tourism roadshows in Istanbul, Izmir and Antalya in the coming months. South African Tourism will also participate at the upcoming EMITT in January 2018 to create further awareness of South Africa as a tourism and business destination.
What is the situation of Turkey-South Africa Bi-National Commission (BNC) agreement? Are there any cooperative efforts taking place through/within the BNC?
The BNC is chaired by our Deputy President and the Turkish Prime Minister, but a number of factors have prevented us from successfully coordinating the schedules of our principles for the next BNC. We are hoping that it will be possible in the New Year. That said, the Joint Economic Commission was held recently in South Africa and we will continue our work through this forum to promote and facilitate trade and economic cooperation between our countries.
A Free Trade Agreement (FTA) between the two countries was turned down by South Africa back in 2011. Why did South Africa take such action? Also, do you believe South Africa will have a different approach to a possible FTA in the future?
As a member of the Southern African Customs Union, South Africa may not enter into an FTA without the approval of other member states, but this does not mean that South Africa is not looking into alternative ways of cementing economic ties with Turkey. South Africa sees Turkey as an important partner, both for South Africa itself and for the rest of the African continent, and the strengthening of our relations is evidenced in the increase in high-level exchanges between our two countries.
What does South African Embassy in Ankara do to promote bilateral economic relations between South Africa and Turkey?
As I explained above, we have signed Memorandum of Understanding with the Chambers of Commerce and Industry in a number of cities, and will use this framework to continue developing relations. We have had a number of business delegations visiting Turkey who engaged in discussions with DEİK and MUSİAD, and we have also conducted trade and investment seminars in these cities in cooperation with the Chambers that we have visited. We need to continue doing this, but also to focus on the sectors that show the most potential for growth in trade.
Any final messages to the Turkish business community regarding South Africa?
South Africa is open for business. I kindly invite Turkish business to come and invest in my country and urge them to explore many other trade opportunities. South Africa manufactures world-class products that would be easily accepted in the Turkish market, while also providing a unique tourism experience. The South African economy is always ready for investment, and we have a number of investment-ready projects in a variety of sectors, including renewable energy, automotive manufacturing, jewelry manufacturing, specialized textiles and garments, among others. For the investors only looking to buy into companies or to own equity, South Africa has a very sophisticated and well-managed securities exchange to deal with such interests.
The Embassy can assist investors in finding the right project for them if they are uncertain of how they want to invest, but if an investor already knows what they wish to do, the Embassy will ensure that the investor is able to engage the correct people in South Africa to ensure their project is a success. This can include setting up meetings with the Department of Trade and Industry for discussions of the broad range of investment incentives that are provided, as well as finding potential partners, sourcing a location and, if necessary, assisting with relocation to South Africa.
