Vietnam Should Focus on African Market

Vietnam should bring its goods to newer, more potential but less competitive markets like South Asia, Africa and the Middle East. Before working as a trade advisor in Vietnam, I worked in some Western and Central African nations. The West African Economic and Monetary Union (UEMOA) consists of all eight French-speaking nations, while the Monetary and Economic Community of Central Africa (CEMAC) has six French and Portuguese-speaking nations. Countries in these groups see annual growth of 4 percent. Business laws in member countries of these groups are similar. UEMOA and CEMAC are free trade areas with common import tariffs ranging from 5 percent to 30 percent.

 

 Each year, CEMAC alone spends 19 billion euro importing goods. This area imports goods including Vietnam’s major exports like consumer goods, foods (rice, wheat and foodstuff), clothing, footwear, machinery, and agricultural equipment. CEMAC could pay US$1 billion for Vietnamese goods each year.

 

Regarding exports, CEMAC can sell crude oil, refined oil, timber, cotton and minerals (iron, manganese, aluminium, etc.) worth US$1 billion each year to Vietnam.

In recent years, trade between Vietnam and CEMAC has progressed rapidly. In 2010, Vietnam earned US$150 million from exports to this region and spent US$100 million on imports from it.

 

Vietnamese enterprises should cash in on their advantages. For instance, Vietnam is a member of La Francophonie, the community of French speaking countries, and this is a great advantage for Vietnamese enterprises to penetrate other Francophone countries in all regions: Indochina, Central - Southern Africa, Eastern - Central Europe, and Western Europe. Each year, the Francophone community finances trade activities in some Western and Central African countries, but I learned that the Vietnamese Ministry of Industry and Trade focuses not only on these regions, but all of Africa as well. In recent years, Vietnam’s exports to new markets have expanded significantly but the results remain unsatisfactory. Vietnam usually enjoys surplus in trade with these markets. Boosting exports to the Middle East and Africa not only helps Vietnam ease pressures from volatile importation in traditional markets, but also helps narrow the trade gap.

 

Trade promotion activities have been accelerated by the Vietnamese Government, the Ministry of Industry and Trade to be more specific, and generated positive results. However, most of them are carried out in the form of attending overseas trade fairs. In my opinion, trade promotion is not limited to logistics, travel and accommodation, but helpful advice for businesses: what markets they should they focus on, what those markets need, how businesses in these markets are supported in terms of legality and tax, etc.

 

To my knowledge, 90 percent of Vietnamese exporters are rated small and medium-size. They cannot export on their own, but they should join forces together. Local authorities and trade promotion agencies should assemble them by organising export cooperation programmes to combine their strengths.

 

 From my international experience, trade promotion in Vietnam does not satisfy what companies need. We must provide regular information updates to meet the needs of companies. To do this, we need the coordination and cooperation of other local competent agencies.

 

 Vietnam’s trade promotion activities in new markets still need to be further accelerated to match the commercial potential of both parties. For example, no Vietnamese banks have a business presence in Africa; thus, payment and guarantee for goods are more difficult. Vietnamese and African businesses have not actively surveyed markets and exchanged information to seek sustainable cooperation opportunities.

 

 Moreover, Vietnamese exporters need to pay special attention to assessing markets and examining trade partners; this is the first measure to limit business risks.

 

 Do you have any advice for more effective trade promotion activities in Vietnam?

First of all, companies must remove their psychological barriers. They always think that they sell most to big markets like the US, the EU or Japan. Meanwhile, product quality requirements in these markets are very high, many trade barriers are erected, and competing pressure is strong from rivals in China, Indonesia, Thailand and other nations. Vietnamese enterprises used to ask me about the supply of cashew nuts and I recommended Guinea-Bissau to them. But, they shook their heads, only seeing the geographical distance. However, we tried to help them meet and work together. To date, each year, Vietnamese enterprises and partners in Guinea-Bissau trade some 200,000 tonnes of cashew nuts.

 

 The Government should also create conditions for closer business cooperation by building general trading corporations to link companies together. Vietnam should hold regular exchange forums for companies to learn about new export trends.

 

 Vietnamese transport companies should be persuaded to open direct traffic links to new markets. Currently, there are two African airlines, Ethiopia Airlines and Kenya Airlines, flying between Vietnam and Africa, and we hope Vietnam Airlines will open direct flights to some countries in this region in the near future.