Vietnam, Africa Strengthen Economic Relationship

The Government has decided the year 2009 to be a pivotal year of economic relationship with Africa, especially in the economic and trade area. Accordingly, the Ministry of Industry and Trade has on March 5 put forward an Action Plan to boost up the economic and commercial relationship with African countries during in the period of 2008-2010. 

Vietnam has established diplomatic relations with 48 over 53 African nations, opening seven diplomatic representative offices in Egypt, Algeria, Libya, Angola, South Africa, Tanzania, Morocco and Nigeria, and five commercial affairs in Egypt, Algeria, South Africa, Morocco and Nigeria.

 

Trade turnover between Vietnam and Africa makes fast growth with US$684 million in 2007, 12 per cent higher than the year 2006. In 2008, Vietnam exported US$1.33 billion to and imported US$756 million from Africa, 95 per cent higher than the year 2007.

 

The structure of exported articles to Africa is more diversified. If the key goods exported from Vietnam to Africa in the 90s was rice, Vietnam has in recent years exported other articles like electric products, electronics, mechanical products, plastic-ware, wooden products, motorbikes, components and spare parts of motorbikes, cigarettes, vegetables and fruits though the value remains modest. If Vietnam's goods were only exported to three African countries in 1991, the exported market is now 53 countries. The most important export markets include South Africa, Egypt, Algeria, and Angola.

 

Vietnam has steadily imported from Africa a considerable quantity of steel (mainly from South Africa), crude cashew nut (from Nigeria, and Ivory Coast), cotton (from Mali, Tanzania), material timber (South Africa, Togo), fertilisers (Tunisia, Swaziland, South Africa), tobacco material (Mozambique, Zimbabwe), and some other items that change by year such as oil and gas, chemicals, tobacco materials, livestock food, pesticides, and materials. In general, imported articles still limit in volume and turnover.

 

In addition, the relationship between Vietnam and African countries is expanded in investment cooperation and industrial production. Vietnam is starting cooperation in petroleum exploitation in Algeria, promoting projects of oil exploration in Tunisia, Madagascar, and Egypt. Some African countries are opening up cooperation with the EU, Middle East, and America, boosting trade liberalisation and taking advantage of tax reference offered by America and the EU. Therefore, we can promote investment cooperation in textile and garment with Africa to make use of on-spot cotton material and cheap labour on one hand, and increase exports to America and the EU to benefit from quota and import tariff exemption on the other hand.

However, the economic and trade relationship between Vietnam and Africa has not corresponded to the potentials. 

The broad objective of the Action Plan proposed by the Ministry of Industry and Trade comprises boosting economic and trade relationship with the African market; pushing up export of articles that Vietnam has strength to African countries of high demand like agricultural produce, rice, food, and civil goods; strengthening mutual trade exchange to cut transportation costs and improve competitiveness; diversifying types of exported and imported articles, focusing on import of African materials such as oil and timber.

 

Taking advantage of preferences that many African countries benefit from America and the EU, or from other African countries to create a bridge of expanding commercial transactions. Striving to raise value of trade exchange to US$2.5 billion in 2009, of which export is worth US$1.6 billion, and to US$3 billion by 2010, of which export makes up for US$1.8 billion, and export growth rate of 20 per cent a year. Speeding up implementation of oil projects that have been signed in Algeria, Egypt, Tunisia, Cameroon, the Republic of Congo, Madagascar, and Nigeria and extending oil activities in some other potential African countries like Angola, and Libya by utilising opportunities to sign contracts of oil exploration and drilling, diversifying the sources of imported crude oil and liquefied natural gas to serve Vietnam's energy security strategy.

 

Intensifying trade promotion activities like participation in trade fairs, exhibitions, market study tours, dissemination of market policies, and local enterprise support. Studying to build trade centres in some countries, establish bonded warehouses in the North, West, and South-East of Africa to facilitate trademark advertising and trade exchange. Diversifying and expanding cooperation with Africa in investment, finance, banking, insurance, and tourism, and creating good conditions for businesses to do export, import, and cooperation in African market.

 

The Ministry of Industry and Trade also proposes in the Action Plan seven measure packages to realise objectives, including: strengthening relationship between the Ministry of Industry and Trade with relevant agencies in African countries; establishing legal frameworks; perfecting, extending, and improving efficiency of commercial affairs; boosting trade promotion; enhancing market information provision; furthering cooperation in oil industry and attracting investment in industry.