10:17 | 11/02/2020 Trade
(VEN) - Two-way trade between Vietnam and Africa surged 250 percent to US$6.6 billion in 2018 from US$2.52 billion in 2010, due to their complementary import and export structures. Vietnam exports mobile phones and components, computers and components, textiles, footwear, rice, coffee, pepper, coconut copra, cashews, seafood, and building materials, which have attracted buyers in Africa, especially in such big markets as South Africa, Egypt, Ghana, Algeria, Ivory Coast, Nigeria, and Cameroon.
Due to natural conditions and political fluctuations, most African countries do not meet their domestic demands for food, foodstuffs and consumer goods and therefore have high demand for importing those goods.
Vietnam needs raw materials from Africa such as crude oil, liquefied gas, plastic materials, common metals, fertilizers, animal feed, cashews, cotton, wood, copper, and ore to serve domestic processing industries and for export.
Forty-five of 55 African countries have joined the World Trade Organization (WTO) and have gradually removed non-tariff barriers and reduced import taxes, creating favorable conditions for Vietnamese goods.
Vietnamese enterprises have had investment projects totaling more than US$3 billion in committed capital in Africa, mainly in the fields of telecommunications, oil and gas, hydropower, and cement factory construction.
At a recent conference themed “Vietnam-Africa cooperation: Sharing experiences in risk management to boost trade with Africa”, Vietnamese and African participants agreed that the potential for bilateral cooperation, especially economic cooperation is huge. However, speakers pointed to challenges for Vietnamese enterprises in penetrating deeper into this market, including those related to social and security instability, geographical distance, differences in language, culture and business practices, and payment-related risks.
Phan Thi Thanh Nhan, Director of Trade Finance Center at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), said one of the issues between Vietnamese and African companies was reliability.
Payment methods played an important role in global trade but most African banks had not met international standards, she said, adding it has hindered trade as Vietnamese firms found it difficult to make payment through local banks.
She warned Vietnamese firms to not advance payment to African sellers or accept late payment for local buyers. “Letter of credit is a creditable method if the issuer of the letter is highly reputable.”
|Vietnam and African countries have favorable conditions to promote economic cooperation, especially in such potential areas as trade, investment, energy, and the environment.|