Illustrative image (Source: VNA) Algiers (VNA) – With a population of1.2 billion and a high economic growth rate in recent years, Africa is apromising market for Vietnam, according to the Vietnamese trade counsellor incharge of several African countries.
Hoang Duc Nhuan, trade counsellor of Vietnam inAlgeria, Senegal, Mali, Niger and Gambia, said Vietnam has set up trade tieswith most of 55 countries in Africa, and total trade between Vietnam and theBlack Continent increased from 5.2 billion USD in 2015 to 6.7 billion USD in2017, of which Vietnam’s exports were valued at 2.7 billion USD.
In the first three month of 2018, Vietnam shipped723.7 million USD worth of goods to Africa, up 20 percent year on year, andimported 212.7 million USD of Africa’s products, down 67 percent.
Major trade partners of Vietnam in Africa areIvory Coast, South Africa, Ghana, Egypt, Algeria, Morocco, Nigeria, Cameroonand Benin.
Vietnam sells to Africa mobile phones, computersand parts, textile-garment, footwear, agricultural products (rice, coffee,pepper bean, copra, cashew nut, tra and basa fish, and shrimp), andconstruction materials, while buying raw materials such as unprocessed cashewnut, cotton, wood, copper, minerals and animal feed.
Besides trade, investment ties have also beenexpanded. As of the end of 2018, businesses from 16 countries and territoriesin Africa had invested in Vietnam with 247 projects worth 1.56 billion USD.Their projects mostly involved processing and manufacturing, wholesale andretail, repairing, science-technology, hospitality and consultation. Meanwhile,Vietnamese firms invested in 33 projects worth nearly 2.6 billion USD in 12African 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 growthhas bolstered consumption demand in Africa, while the local industrial sectoris under developed. Therefore, total imports of the continent are forecast toreach 1.2 trillion USD in 2020 from 480 billion USD in 2016. This promises bigopportunities for Vietnamese goods, which are well received in this market.
In addition, natural disasters and politicalunrests greatly affect food production in the continent, forcing many Africancountries to import food. Total spending on importing agricultural products isexpected to increase to 110 billion USD in 2025 from 35 billion USD in 2016.
43 out of 55 countries in Africa have joined theWorld Trade Organisation (WTO) and gradually removed import tariff andnon-tariff trade barriers, facilitating imports.
Africa also holds attractive reward forinvestment, as the continent boasts abundant raw materials. Investors not onlybenefit from the available sources of materials and labour but also becomeeligible for preferential tax when exporting to other countries in the regionas well as to the EU and the US.
In particular, 44 African countries signed anagreement on the Continental Free Trade Area (CFTA) in March this year, underwhich they commit to remove tariffs for more than 90 percent of goods in thefuture. Therefore, investment in the continent will facilitate access to thosemarkets.
But Nhuan cautioned that it is not without anyproblems when doing business with Africa. According to him, political andsocial instability, coupled with big differences in language, culture, legalframework and business practice, pose considerable obstacles to trade andinvestment ties.
Besides, Vietnam has few diplomatic and traderepresentative offices in Africa, with eight embassies and five trade officesat present, which cause difficulties in getting visas, or in collecting marketinformation and holding trade promotion activities.
Vietnamese firms are also deterred by trade fraudsand payment methods when doing business with African peers, while the legalframework for business activities is incomplete, according to Nhuan. -VNA
VNA
