Africa- Ideal Market

 

Africa has huge demand for rice, cement, tea, seafood, textiles, construction materials, vehicles and electronics. Purchasing power in the African market is high, but the quality requirements are not as strict as the EU, USA or Japan. It can be said, Africa is quite an ideal market, consistent with the level of production and the ability of businesses to access Vietnam.

 

Vietnam and African countries have developed good diplomatic relations for many decades. Vietnam has fine cooperation in the fields of education and health with those countries. Vietnam has established relations with the Francophone countries since the 1970s and with Portuguese -speaking countries since the 1980s. In recent years, many Vietnamese citizens have started doing business and living in Angola, Mozambique, Republic of Congo, Central African Republic, Ghana and Sudan. The Vietnamese who are engaged in business services, manufacturing and construction are appreciated by the local people. They want more and more employees from Vietnam to come to Africa to work.

 

Africa has great potential in agriculture, fisheries, forests and rich mineral. They are in need for the joint venture to exploit that potential to contribute to the poverty reduction that leaders of African countries are pursuing.

 

Africa also provides abundant unskilled, young, and cheap labour for Vietnamese enterprises.

 

Nevertheless, Africa still poses challenges for Vietnam enterprises who want to invest in it, for example, geographically distance, unfavourable travel system connections (generally 2 to 3 times in transit to get to the destination, expensive freight rates - 2 times as the same amount of tickets compared to European and American countries ); complex visa procedures, and that immigration officials in a number of African countries refuse entry to foreign citizens, though they have visa.

 

Most Vietnamese businesses lack accurate information about the host country or its partners. In terms of payment, it does not follow the international rules because African businesses pay in cash or via bank transfers and they rarely open L/C which leads to more risk.

 

To turn those cooperation opportunities into reality, Vietnam needs to promote specific cooperation. The State has to issue economic policy to support Vietnamese businesses to invest and exploit African markets such as corporate income tax reduction or corporate income tax exemption for a certain period of time, rather than the general supporting policy.

 

In addition, it is necessary to maintain and promote the electronic portal Vietnam –Africa of the Vietnam Chamber of Commerce and Industry (VCCI). Diplomatic agencies of Vietnam in African countries have to understand the political and economic situation of the host country to advise the Government in the investment policy with African countries.

 

The Standing Committee of the Vietnam Committee for Solidarity and Cooperation with Africa must act as a firm foundation for the public diplomacy, uniting public organisations and enterprises to further strengthen the friendly relations and cooperation through the diplomatic missions of African countries in Vietnam.

 

For Vietnam businesses, when starting penetration, investment and cooperation in Africa, it is vital to learn the laws, business practices, immigration law, investment law, customs and policies. They must choose the most suitable and not spreading activities. When there is absence of those conditions, they should not invest or do business there.

 

In particular, they need to have good foreign language which is a key stage of the approach process for the business.