African Exports Remain Stable

According to statistics from the Vietnam General Department of Customs, the key exports to Africa are rice, phones, coffee, pepper, seafood, computers, electronic products & components, means of transport and spare parts, machinery and equipment, textiles and footwear. In particular, rice is the staple export. Vietnamese rice is available in 30 African countries. According to the Vietnam’s Food Association, in recent years, Africa has become one of the major rice exporters of Vietnam, accounting for an average of 15-20 percent of Vietnam’s total annual rice exports, ranked third only to Asia and the Middle East.

 

In the first 7 months of 2013, Vietnam’s rice export to Africa had increased by one million tonnes, earning US$441.2 million. Africa is also the largest rice import market of Vietnam in the first 12 days of September, representing about 67.02 percent of the total export volume. With a population of over one billion, the demand for rice in Africa is increasing due to the convenience of rice processing compared to millet and other grains.

 

In addition, the income of the African people is improving so rice prices are not too high compared to the income of the majority of the African people, so rice becomes a popular food in daily meals. The largest importers of rice in Africa are Nigeria, Senegal, Ivory Coast, Ghana, South Africa, Tanzania, Algeria, Cameroon and Guinea.
In the current tough conditions, the expansion of the African market is a positive new direction for Vietnam’s exporters. Because, in general, countries in Asia and other traditional markets have encouraged intensive rice cultivation, leading to reduced consumption of imported rice. The price of rice to Africa tends to increase and African importers are looking to buy fragrant rice because its price is still lower than that of Thai rice.

 

Banks and telecommunications companies in Africa have a huge demand for computerization to develop electronic banking (E - Banking), banking transactions through mobile phones (M - Banking) and mobile Internet. Phones, computers, electronic products and components are commodities expected to bring high value when exported to African markets.

According to statistics, in 2011, total exports of computers, electronic products and components from Vietnam to Africa reached US$68.8 million, up 177 percent compared to 2010. In 2011, these products were present in 27 African countries. The biggest importers of Vietnam’s computers and components are South Africa, Nigeria, Ethiopia, Kenya, Algeria, Sudan, Senegal, Ivory Coast and Ghana, in which, South Africa is the largest importer. In the first 8 months of 2013, exports of phones and components to South Africa reached US$282.68 million, computers and components US$17.9 million and machinery, tools, spare parts US$10.31 million.
Exports to Nigeria in the first 8 months also reached US$101.28 million, up 18 percent compared to the same period last year, including computers, electronic products and components, reaching US$50.28 million.

In addition, the majority of African countries deploying e-government programmes and the development of education is increasing the demand in Africa for equipment and IT solutions, so components and electronic devices will have more opportunities for export to these markets in the future.

 

However, because the contracts of Vietnamese enterprises are often mediated by a third country, dealing with African markets can lead to unexpected risks. Therefore, Vietnam enterprises should be cautious with purchase offers for large value contracts and simple transaction terms. Besides, enterprises also should be prepared for every model and focus on moderate-quality products, easy to use and having affordable price and focus on the payment method, to avoid the risk in transaction.