Skyscraper City Forum banner
1 - 20 of 38 Posts

·
RETIRED
Joined
·
2,613 Posts
Discussion Starter · #4 ·
Africa offers small Turkish companies a chance to become ‘tigers’
An Ottoman-style market (Bedesten) in Somalia

Economic vibrancy in Africa is not limited to investments for production and manufacturing. Turkish businessmen rely on different projects to revive the overall economy in the continent. One such project is the construction of a trade center that Mustafa Erkan, a businessman from İstanbul is in the middle of preparing in Mogadishu, the capital of Somalia. The facility, which will be named the İstanbul Bazaar, will host wholesalers of furniture, carpet and dry foods. The bazaar, also known as a bedesten, will likely make a $500 million contribution to Turkish exports every year.

Noting that they have been doing business in South Africa for many years, Erkan says they are familiar with the continent. Erkan, recalling that Somalia is one of the best places to do business, stresses that the sources are scarce in the country and that it is not possible to find most products. Erkan further said: “It is almost as though there is no toothpick or needle in this country. This is also the case for the construction industry. The cement factory is idle. Iron is brought from other countries. The products imported from China are of low quality. In addition, the goods imported from Dubai are expensive.” Security is the greatest problem in Somalia. For this reason, the investors are hesitant to start business in the country. The İstanbul Bazaar offers a reliable and secure environment for investors.

Noting that the Bazaar will serve the interests of both Somali and Turkish businessmen, Erkan says: “No VAT tax is levied on our products in places like Mogadishu. There isn’t a significant amount of transport cost because we are wholesalers. The profit margin is not so big. But because we are not retailers, we will not have to deal with the complaints by the local people.”

So far, $15 million have been invested in the İstanbul Bazaar. In addition to contributing to the development of the Somali economy, the bazaar, which will open its doors in 2013, will also improve the overall employment in the country. Erkam Meriç who was assigned as general manager of the bazaar says that they will follow the traditional code of business inherited from the Ottoman times and they would like to revive the ethical code of the time.

Details about the second phase will be announced after the construction of the first phase of the bazaar. Erkan says that further details can be obtained at www.istafbazaar.com
 

·
RETIRED
Joined
·
2,613 Posts
Discussion Starter · #5 ·
The part quoted below is an interesting middle-finger to all the multi-million $ Somali companies getting rich in the Ugandan, Kenyan, Tanzanian, Rwandan, etc economies, while ignoring their own virgin market that's about to boom. The young Turkish companies will get the early bird, may the realization of this fact burn deeply in the heart of every Somali entrepreneur lol, that should get them fired up:

The bazaar, also known as a bedesten, will likely make a $500 million contribution to Turkish exports every year.
 

·
RETIRED
Joined
·
2,613 Posts
Discussion Starter · #6 ·
Wow! That looks awesome, did the construction start? :banana:
The first phase will open in 2013, so construction has started.
 

·
Premium Member
Joined
·
31,191 Posts
The part quoted below is an interesting middle-finger to all the multi-million $ Somali companies getting rich in the Ugandan, Kenyan, Tanzanian, Rwandan, etc economies, while ignoring their own virgin market that's about to boom. The young Turkish companies will get the early bird, may the realization of this fact burn deeply in the heart of every Somali entrepreneur lol, that should get them fired up:
:lol:

Biis! Early bird gets the worm.
 

·
Registered
Joined
·
220 Posts
Somalia needs to have good economic laws and structure, before dealing with the outside world on big projects. I think it's a shame that Somalia is heading too fast, without looking at the details.

We need to have a vision for the country and put the country first, always.

What I'm trying to say is that Somalia needs to develop its own local economies to compete within the country and also outside of its borders. This has to be done carefully.

Export should be the main focus and not import. We have a huge imbalance between import and export in Somalia. The country imports almost everything. In the future this must be different.


Export growth is important because of its effect on internal trade and economic stability. The rate of economic growth and the distribution of income and wealth in a country are closely related to export growth.

Growth of an economy is directly related to exports. If exports increase at a faster pace as compared to imports, nothing can stop an economy from being a developed one.

Yes, import will stay important especially in the next 10 or so years. But the focus should be on how to create and empower local economies for export.

Ecouraging entrepreneurial spirit, innovativity, education and protectionism to a certain extent, are important.

An example for empowering local economies is to ban NGO's for the coming years from importing food from abroad (a percentage or quota) and to let them stimulate farmers and buy the food from them. These are durable solutions.

Import should be discouraged with for instance relatively high tarriffs. There should be laws for foreign companies working within the country to hire local laborers. And that they can bring in foreign experts, but not laborers. Which will force them to hire locals.

Now it seems that Somalis will become consumers and importers.

It will then never become a developed or 1st world country if it goes on like this. Somalia will be covered with import goods and full of foreign companies that will overshadow any local economy.

I'm not trying to be pessimistic here, just cautious.

I do love that the Turkish people are building hospitals and orphanages, but at the same time we have to think of our own economy.
 

·
Registered
Joined
·
1 Posts
"will likely make a $500 million contribution to Turkish exports every year"

Somalia's GDP is little over 6 billion dollars. So, almost 10% of the whole economy is going to go through this building.

In other words, the writer thinks everybody in the country will spend almost 10% of their income right in this building, or 10% of the population will spend all of their income in this building, or something in between the two.

Isn't it beautiful when people just make up numbers? I wish I had an investment that returned 500 million annuity over "15 million" investment.
 

·
RETIRED
Joined
·
2,613 Posts
Discussion Starter · #15 ·
Somalia's GDP is not known because its 99% informal, it's much larger than the various guestimates. You have two ports in the North alone exporting $2 billion worth of live-stock annually, which is comparable to Ethiopia's entire export volume, and still you have international monetary organisations that put 'Somali exports' at $300 million, so their data isn't reliable.

Instead focus on statistics gathered by those on the ground, for example the Somali telecommunication industry has an annual revenue of between $600 to $1 billion, it's only logical that Somalis would be spending a greater figure on more essential products than electronics and internet. Remittances stand at $2.6 billion, majority of which is used to start new businesses or 'import' stuff. Therefore if a Turkish company bypasses international Somali import markets, and establishes a direct presence, the consumers could be spending hundreds of millions a year on that 'building' alone.

With stability, the spending power of the locals will be far greater than its now, which is a natural side-effect of peace. Thousands of expats have already returned establishing new ventures, the economy will accelerate into a healthy growth figure in the next five years, so this Turkish initiative from a business persepective is brilliant.

However, Somalia aside, you're completely forgetting the country's strategic location, this new business hub isn't necessarily only targeting Somali consumers, it will be a hub for the entire East African region, much the same way their South African business is a hub for the Southern region. Also, that $15 million figure is for the first phase only, there are other phases part of this project.
 

·
RETIRED
Joined
·
2,613 Posts
Discussion Starter · #16 · (Edited)
Somalia needs to have good economic laws and structure, before dealing with the outside world on big projects. I think it's a shame that Somalia is heading too fast, without looking at the details.
Come on bro, this is just one Turkish business project, out of a dozen infrastructural ones. This is no threat to a revived Somali economy that could easily grow at double digit speed. For two decades the Somali companies getting fat in the Kenyan, Tanzanian, Ugandan, Rwandan and UAE economies had a chance to establish an equivalance of this bazaar in Somalia, but opted to establish their businesses overseas, which is why Somalis after the Iranians are the largest re-exporters of goods in Dubai.

I don't believe in strict protectionism, it will make the locals lazy and uncompetitive. This is one of our positive business characteristics; our competitive streak, it's Somali traders bringing the heat to business groups like the Chinese, Lebanese or the Indians all across Africa, are you telling me we can't do the same on our hometurf?

Their is no significant imbalance between our exports and imports, unless you take the static decades old data by the likes of IMF or the CIA World Factbook as a reference for Somali economics. The real problem is the dormant industries that need to be revived pronto, such as the fruit and vegetable plantations of the South that were the biggest employers in East Africa in the prewar period. The real problem is the underutilization of our rich resources, be it oil, gold, gemstones, uranium, aquaculture, etc found all over the country.

All of these would offset whatever Chinese, Turkish, American wholesaler, trader or company could bring to the markets. However, we should not discourage the latter from doing business in our country, their presence will keep the Somali traders and businesses on edge in a healthy way and keep the economy competitive.

The only sectors that need to be protected by the goverment are the agricultural sector and the resources-sector. The first has the potential to make us self-sufficient again like in the past, and with surplus exported to the Middle-East, Asia and Europe, hence no major land sales of any kind to a foreign company or country. The second is a well known major revenue maker that could transform Somalia within in a decade and that shouldn't be taken lightly, so I support resource-nationalism.

Entrepreneurialism however should not be protected, if we end up importing everything from clothing to electronics then the fault lies with us, and only us for not creating similar companies, now we have atleast the civil-strife as an excuse, but if in ten years time the situation is the same, then eggs on our faces! There is no need for high-tariffs and scaremongering, Somalis will buy anything from another Somali for the simple fact that the company or shop is a Somali one, so they already have the consumers on their side, giving them a major adventage over the foreign traders and companies bringing their goods.

If Somalis can establish thousands of successful businesses in a competitive capitalistic environment like the West, serving a loyal Somali clientele, logic dictates that they should be capable of doing the same at home at a far greater rate of success.
 

·
Premium Member
Joined
·
31,191 Posts
"will likely make a $500 million contribution to Turkish exports every year"

Somalia's GDP is little over 6 billion dollars. So, almost 10% of the whole economy is going to go through this building.

In other words, the writer thinks everybody in the country will spend almost 10% of their income right in this building, or 10% of the population will spend all of their income in this building, or something in between the two.

Isn't it beautiful when people just make up numbers? I wish I had an investment that returned 500 million annuity over "15 million" investment.
Don't take any numbers in Somalia seriously. Also, welcome to the forum.
 

·
Registered
Joined
·
802 Posts
Come on bro, this is just one Turkish business project, out of a dozen infrastructural ones. This is no threat to a revived Somali economy that could easily grow at double digit speed. For two decades the Somali companies getting fat in the Kenyan, Tanzanian, Ugandan, Rwandan and UAE economies had a chance to establish an equivalance of this bazaar in Somalia, but opted to establish their businesses overseas, which is why Somalis after the Iranians are the largest re-exporters of goods in Dubai.

I don't believe in strict protectionism, it will make the locals lazy and uncompetitive. This is one of our positive business characteristics; our competitive streak, it's Somali traders bringing the heat to business groups like the Chinese, Lebanese or the Indians all across Africa, are you telling me we can't do the same on our hometurf?

Their is no significant imbalance between our exports and imports, unless you take the static decades old data by the likes of IMF or the CIA World Factbook as a reference for Somali economics. The real problem is the dormant industries that need to be revived pronto, such as the fruit and vegetable plantations of the South that were the biggest employers in East Africa in the prewar period. The real problem is the underutilization of our rich resources, be it oil, gold, gemstones, uranium, aquaculture, etc found all over the country.

All of these would offset whatever Chinese, Turkish, American wholesaler, trader or company could bring to the markets. However, we should not discourage the latter from doing business in our country, their presence will keep the Somali traders and businesses on edge in a healthy way and keep the economy competitive.

The only sectors that need to be protected by the goverment are the agricultural sector and the resources-sector. The first has the potential to make us self-sufficient again like in the past, and with surplus exported to the Middle-East, Asia and Europe, hence no major land sales of any kind to a foreign company or country. The second is a well known major revenue maker that could transform Somalia within in a decade and that shouldn't be taken lightly, so I support resource-nationalism.

Entrepreneurialism however should not be protected, if we end up importing everything from clothing to electronics then the fault lies with us, and only us for not creating similar companies, now we have atleast the civil-strife as an excuse, but if in ten years time the situation is the same, then eggs on our faces! There is no need for high-tariffs and scaremongering, Somalis will buy anything from another Somali for the simple fact that the company or shop is a Somali one, so they already have the consumers on their side, giving them a major adventage over the foreign traders and companies bringing their goods.

If Somalis can establish thousands of successful businesses in a competitive capitalistic environment like the West, serving a loyal Somali clientele, logic dictates that they should be capable of doing the same at home at a far greater rate of success.
I couldn't have said better bro,masha Allah you are very bright sxb Somalia needs people like you
 

·
Registered
Joined
·
2 Posts
Don't take any numbers in Somalia seriously. Also, welcome to the forum.
Population numbers especially. According to the respective governments; there are 3.5 million people in Somaliland and 2.4 million in Puntland :lol:.

On topic. It's nice to see that future trade agreements and business ventures outside the hospitality sector are already being looked at.
 
1 - 20 of 38 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top