Vietnamese goods arrive in Africa

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Prices of Vietnamese seafood products in many African countries are currently very competitive. Photo: Nguyen Thanh

Opportunities for rice, pepper, seafood, footwear

According to the Trade Promotion Department (Ministry of Industry and Trade), Vietnam has established trade relations with all 54 countries in the African region. In recent years, two-way trade has recorded positive growth.

“With the geographical advantage of having an area of over 30 million square kilometers, a population of about 1.3 billion people, and having a high demand for importing a variety of products suitable for Vietnam's key exports, Africa is a market with diverse opportunities for Vietnamese enterprises,” said Mr. Le Hoang Tai, Deputy Director of the Trade Promotion Department.

At present, the largest export item of Vietnam to Africa is rice (accounting for 20% of Vietnam's total export turnover to Africa). The issue of food security has been of concern to African countries and has become even more of a concern amid the Covid-19 pandemic. Meanwhile, rice production of African countries only meets 60% of the region's needs. Therefore, Vietnamese rice can boost exports to African countries, especially Ivory Coast, Ghana, and Mozambique.

In addition to rice, Africa also has a great demand for coffee and pepper. Every year, Africa spends about US$750 million to import coffee. Vietnam is one of the five main supply markets. Notably, in addition to raw exports, a number of Vietnamese processed coffee brands such as Trung Nguyen and King Coffee are also interested in this area. In addition, African countries, especially South Africa, Nigeria, and Kenya also have a great demand for textiles and footwear.

Going into a more detailed analysis of the Egyptian market, Mr. Nguyen Duy Hung, in charge of the Vietnam Trade Office in Egypt, said that although Egypt is an exporter of agricultural products, Egypt is reducing the production of crops that consume water, so they have to import many agricultural products such as rice and vegetables. In addition, this market also has great demand for unprocessed nuts such as pepper and cashew.

Similarly, in the Algerian market, Mr. Hoang Duc Nhuan, Commercial Counselor, Vietnam Trade Office in Algeria, said that this country imports a lot of food products, consumer goods, agricultural products (rice, spices of all kinds, including pepper, cashew nuts), and seafood (pangasius, basa fillet, raw tuna). The price of aquatic products and seafood in this market is high, so Vietnam's prices are quite competitive. In addition, construction materials, fabrics, yarn and shoes are also promising in this market.

Overcoming language barriers

For many years, many export products of Vietnam are too dependent on a number of large markets, traditionally a limitation in exports, posing high risks when "putting all their eggs in one basket". How to diversify export markets and minimize risks, especially when Vietnam's economy is increasingly integrated into the world economy, is of interest to economic experts. The leader of the Trade Promotion Agency said that expanding and developing trade cooperation with potential new markets in Africa is one of the solutions that Vietnam needs to strongly focus on.

From the perspective of advantages of the African market, Ms. Nguyen Minh Phuong, representative of the Asia-Africa Market Department (Ministry of Industry and Trade), further analyzed that Africa's raw materials and labor resources are abundant and there are many FTAs that have been signed. Besides, African countries are attracting investment from foreign capital, so the policy is open. These are favorable conditions for Vietnamese enterprises to promote business cooperation with this market. In addition, Vietnamese enterprises have many advantages when exporting to Africa because the two sides have good traditional political relations, African people favor using Vietnamese goods," said Phuong.

There are many opportunities, but it is not easy to promote exports to the African market. Enterprises must prepare to overcome many challenges. In fact, fraud in commercial transactions in African countries is quite common. The most recent are scams through bidding. Scammers who agree to buy Vietnamese goods at high prices, then ask Vietnamese enterprises to send money to take care of procedures or objects that offer goods to Vietnamese enterprises at low prices, asking Vietnamese enterprises to deposit the funds. After receiving money from Vietnamese enterprises, the subjects will close the website and flee.

One of the problems when looking to accelerate exports to the African market is that Vietnamese goods have to compete with similar products of many other Asian countries such as China, Thailand, and Indonesia. In addition, import tax in some countries is also relatively high.

“In Algeria, the average import tax into this country is over 30%. In addition, Algeria also applies additional defense tax, especially for domestically produced goods," said Mr. Hoang Duc Nhuan.

Language is also an barrier. Many African countries mainly communicate in Arabic. Therefore, Vietnamese enterprises need to write the information on the label in two languages: Arabic and French or English. African countries are mainly Muslim, so products entering this market also need to pay attention to Halal certificates.