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Project to boost exports to Africa
A project to boost exports to Africa, a location considered to be a potential market for Vietnamese goods in the wake of saturation in traditional markets, was ratified by the Ministry of Industry and Trade (MoIT).
Under the project, the ministry will select a number of large exporters to focus on Africa specifically and they will be grouped together to focus on exporting special products to key markets in the region.
MoIT will also ask the Government to introduce policies to encourage small- and medium-sized businesses to do more business in Africa.
Besides rice, apparel, coffee, footwear, electronics and construction materials, the ministry will also urge exporters to ship goods that are in high demand in Africa, such as household utensils, consumer goods, food, plastics, mechanical goods and medicine.
Africa is the world's third largest continent with 54 countries and a total population of more than 1 billion. As the continent's economy is forecast to expand by about 4.5 per cent this year, they will likely need to import various necessities and a greater volume than in the past.
Currently, Vietnamese products are present in 53 African countries. The key export markets are Egypt, South Africa, Angola, Nigeria, Ghana and Algeria.
Strategic gateway
Two-way trade between Viet Nam and Africa has grown by an average of 45 per cent per annum. Last year, Viet Nam's exports to Africa reached US$1.56 billion, an increase of 20 per cent compared to 2008, of which South Africa accounted for roughly 30 per cent.
Do Quang Lien, commercial counselor to South Africa, said Vietnamese businesses should strengthen their investment and exports to South Africa as it is the continent's largest economy and a strategic gateway for trade between the continent and other countries.
Viet Nam's main exports to Africa include rice, consumer goods, textiles and garments, electronics, plastic and wooden products, coffee, motorbikes, dairy products, seafood and processing foodstuff. Currently, rice accounts for roughly 40 per cent of Viet Nam's total export turnover to Africa and it is forecast that the product will remain at the top of Viet Nam's exports to Africa for the next five years.
Although trade between the two countries has increased, Vietnamese exporters to Africa are still facing challenges, including incomplete legal policies, poor infrastructure, an undeveloped banking system and a lack of information about African countries in general.
Apart from Africa's remote location, which bumps up transport costs, the difficulty in making payments is a daunting one. Le Thi Thai Hoa, deputy director of the Ministry of Industry and Trade's African Market Department, said several African countries were saddled by outdated payment facilities, which deter Vietnamese enterprises from penetrating this market.
To deal with this, Hoa suggested businesses should actively contact her department and Viet Nam's trade offices in African countries to seek help, avoid fraud and minimise risk.
This year, Viet Nam targeted a 3-per-cent increase to $1.6 billion in export revenue to Africa.
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