How Investment Arbitration Protects Turkish Investors in Africa

Africa: The Strategic Expansion Frontier

Africa is no longer merely an emerging opportunity for Turkish companies — it is a strategic expansion frontier. Over the past two decades, Türkiye has built a deep economic presence across the continent through trade, infrastructure, energy, and construction investments.

Which sectors does Turkey operate in Africa?

Turkish investments are concentrated primarily in infrastructure, energy, mining, textiles, and defence. Senegal, Tanzania, Ethiopia, Nigeria, and more recently Libya and Somalia, are at the centre of Turkey's commercial outreach.

The energy sector is the biggest driver of this expansion. At peak supply, Karpowership vessels have reportedly provided up to 15% of Senegal's electricity, the vast majority of Sierra Leone's supply, and nearly all grid power in Guinea-Bissau. Simultaneously, Turkish construction companies are undertaking multi-billion dollar projects such as the Standard-Gauge Railway in Tanzania.

Opportunities and institutional support

Turkey has supported this growth through its "Opening to Africa" initiative (1998) and the "Africa Partnership Policy" (2013). Today, DEİK has established Joint Business Councils with 45 African countries, and Turkish Airlines connects Istanbul to 40 countries across the continent.

However, alongside these opportunities, the region carries inherent risks. Political shifts, recent military coups in the Sahel region, and geopolitical realignments can leave investors exposed to expropriation, sudden regulatory changes, or government interventions that devastate profitability.

The Scale of Turkey–Africa Investment Activity

Türkiye's African Initiative Policy, which started in 1998, gained momentum when the country became an observing member and strategic partner of the African Union in 2005 and 2008 respectively. The total trade volume with Africa has increased from USD 5.4 billion in 2003 to USD 34.5 billion in 2021 — an eightfold increase in under two decades.

Turkish defence industry exports to Africa rose by 653% from 2015 to 2021, while Turkish Airlines routes to the continent grew by approximately 1,140% since 2005. None of Ankara's regional rivals has invested as much on the continent, making Türkiye an increasingly indisputable regional power in Africa.

Lessons From the Past: The Libya Precedent

Turkish investors have initiated approximately 15–20 investment treaty cases across Africa, primarily targeting Libya following the 2011 Arab Spring. These disputes were triggered by security collapses, looting, and chronic non-payment. Investors typically argued that host governments failed to provide "Full Protection and Security" as required by bilateral treaties.

The rulings from international tribunals (ICSID and ICC) have been mixed:

The "Protection Gap" by the Numbers

As of early 2026, there are approximately 1,440 registered investment arbitration cases worldwide, with roughly 400 of these brought against African states. While Turkish investors are active in mining, electricity, and gas, a significant protection gap remains.

The majority of Turkish investors in Africa have never conducted a "BIT audit". Many operate outside treaty protection because their corporate vehicle does not qualify as a "protected investor" or the relevant BIT was not identified during the structuring stage.

Strategy Begins at Signing

Türkiye is on the way to becoming a genuine regional power in Africa. In this context, international arbitration is not just a safety net — it is a deterrent. States are less likely to interfere with investments they know are shielded by an enforceable BIT and an investor prepared to use it.

The practical lesson from the Libya cases and the broader African arbitration landscape is consistent: investors who structure carefully, document diligently, and engage counsel early recover. Those who do not often find that no legal remedy can undo the damage already done.