Illustrative image (Source: VNA)
Algiers (VNA) – With a population of
1.2 billion and a high economic growth rate in recent years, Africa is a
promising market for Vietnam, according to the Vietnamese trade counsellor in
charge of several African countries.
Hoang Duc Nhuan, trade counsellor of Vietnam in
Algeria, Senegal, Mali, Niger and Gambia, said Vietnam has set up trade ties
with most of 55 countries in Africa, and total trade between Vietnam and the
Black Continent increased from 5.2 billion USD in 2015 to 6.7 billion USD in
2017, of which Vietnam’s exports were valued at 2.7 billion USD.
In the first three month of 2018, Vietnam shipped
723.7 million USD worth of goods to Africa, up 20 percent year on year, and
imported 212.7 million USD of Africa’s products, down 67 percent.
Major trade partners of Vietnam in Africa are
Ivory Coast, South Africa, Ghana, Egypt, Algeria, Morocco, Nigeria, Cameroon
and Benin.
Vietnam sells to Africa mobile phones, computers
and parts, textile-garment, footwear, agricultural products (rice, coffee,
pepper bean, copra, cashew nut, tra and basa fish, and shrimp), and
construction materials, while buying raw materials such as unprocessed cashew
nut, cotton, wood, copper, minerals and animal feed.
Besides trade, investment ties have also been
expanded. As of the end of 2018, businesses from 16 countries and territories
in Africa had invested in Vietnam with 247 projects worth 1.56 billion USD.
Their projects mostly involved processing and manufacturing, wholesale and
retail, repairing, science-technology, hospitality and consultation. Meanwhile,
Vietnamese firms invested in 33 projects worth nearly 2.6 billion USD in 12
African countries (statistics as of the end of 2015), focusing on oil and gas,
telecommunication, hydro electric power and wood processing.
The trade counsellor said a high economic growth
has bolstered consumption demand in Africa, while the local industrial sector
is under developed. Therefore, total imports of the continent are forecast to
reach 1.2 trillion USD in 2020 from 480 billion USD in 2016. This promises big
opportunities for Vietnamese goods, which are well received in this market.
In addition, natural disasters and political
unrests greatly affect food production in the continent, forcing many African
countries to import food. Total spending on importing agricultural products is
expected to increase to 110 billion USD in 2025 from 35 billion USD in 2016.
43 out of 55 countries in Africa have joined the
World Trade Organisation (WTO) and gradually removed import tariff and
non-tariff trade barriers, facilitating imports.
Africa also holds attractive reward for
investment, as the continent boasts abundant raw materials. Investors not only
benefit from the available sources of materials and labour but also become
eligible for preferential tax when exporting to other countries in the region
as well as to the EU and the US.
In particular, 44 African countries signed an
agreement on the Continental Free Trade Area (CFTA) in March this year, under
which they commit to remove tariffs for more than 90 percent of goods in the
future. Therefore, investment in the continent will facilitate access to those
markets.
But Nhuan cautioned that it is not without any
problems when doing business with Africa. According to him, political and
social instability, coupled with big differences in language, culture, legal
framework and business practice, pose considerable obstacles to trade and
investment ties.
Besides, Vietnam has few diplomatic and trade
representative offices in Africa, with eight embassies and five trade offices
at present, which cause difficulties in getting visas, or in collecting market
information and holding trade promotion activities.
Vietnamese firms are also deterred by trade frauds
and payment methods when doing business with African peers, while the legal
framework for business activities is incomplete, according to Nhuan. -VNA
