Vietnam to promote industrial cooperation with Africa

Vietnam and Africa will hold a joint seminar entitled “Vietnam-Africa: Cooperation for Sustainable Development” from August 17-19 to review bilateral cooperation and work out the most effective model for cooperation.

Ly Quoc Hung, General Director of the West Asian and African Department under the Ministry of Industry and Trade, said the state has adopted a national action plan to promote cooperation with Africa in the 2004-2010 period, under which many legal and financial tools to encourage investment in Africa will be enacted soon.

He listed 10 fields including agriculture, trade, energy, and labour, in which Vietnam and Africa can cooperate well.

Despite its wealth of natural resources, Africa has an undeveloped industrial sector which offers opportunities for Vietnam to strengthen cooperation and expand its business interests in the continent, said Hung, adding that Africa’s trust in and admiration for Vietnam are additional advantages for Vietnamese businesses.

Good opportunities for Vietnamese businesses

Africa is famous for its abundant resources with 9.5 percent of the world’s oil reserves, 8.2 percent of natural gas, 90 percent of cobalt, 90 percent of platinum, and 50 percent of the world’s gold reserves.

However, Hung said, Africa’s industry is considered the most backward in the world. Except for oil and gas, most industries can not meet domestic demands and compete with other countries. Industry makes up only 25 percent of Africa’s GDP.

In addition, the industrial growth rate in Africa has dropped in recent years because of financial constraints and out-of-date technologies.

According to Hung, Africa’s open-door policies of the 1990s coupled with the influx of foreign industrial products have paralysed domestic businesses and stunted its industrial development.

Considering industrialization and modernization to be the only way to bringing about peace, stability, and development, African countries have set a target to raise industrial production to 50 percent of their GDP by 2030.

Africa’s weak industries offer good opportunities for Vietnam’s developed industries and products such as mining, textiles and garments, footwear, agriculture, electronics, bicycles, motorcycles, wood products, construction materials, and pharmaceuticals.

Breakthroughs in ten sectors

The National Action Plan to Promote Vietnam-Africa Cooperation in the 2004-2010 period affirms that Africa can be a key strategic field of cooperation to promote Vietnam’s political diplomatic, economic, cultural and scientific-technological relations.

Vietnam’s past cooperation with Africa has helped promote technology transfers and attract materials from Africa for the cause of national industrialisation and modernisation.

So far, oil and gas exploration and exploitation have been given top priority in Vietnam-Africa cooperation. PetroVietnam has six ongoing projects in Africa and will continue to expand its operation in this potential market.

Africa has the world’s largest reserves of platinum, chrome, manganese and cobalt, as well as valuable natural resources such as gold, diamonds, copper, iron, coal, tin, bauxite and phosphate. Vietnam hopes to cooperate with African businesses to explore and exploit these minerals.

Africa has great potential for chemical and fertiliser production. In addition to its projects in Egypt and Morocco, Vietnam hopes to expand to other African markets, especially a phosphate project in Algeria and chemical production projects in Nigeria, Lybia, South Africa and Angola.

Africa is a large consumer of garment and textile products and many African countries offer the US and European Union preferential import tariffs. This could provide a good opportunity for Vietnam’s garment sector to penetrate the African market and take advantage of low labour and material costs and the huge consumer market.

Many African nations have abundant sources of raw materials but their production capacity is limited. Vietnam’s leather and footwear sector could create joint ventures to make full use of its technology and equipment in these markets.

Vietnamese businesses can also cooperate with African trading partners to make wood products to serve both African and global markets.

Africa has an urgent demand to develop infrastructure, but its capacity is very limited. This is also a good chance for Vietnam to produce construction materials for the African market such as cement, bricks, ceramics, porcelain, and sanitation equipment.

At present, the agricultural sector accounts for a large proportion of the economic structure of many African countries, and their technology for food processing and agricultural production does not meet their requirements. These nations are calling for foreign businesses to invest in their food processing sector, including rice, coffee, vegetables and fruit, cashews, corn, cassava, potatoes and noodles, as well as in their aquaculture sector.

As African farmers still apply out-of-date cultivation methods, Vietnam can set up joint ventures to produce agricultural machinery and equipment in Africa.

Vietnamese businesses can also fill a niche in the market for bicycles and motorbikes as they have done in Mali. -VOV

Tags: Vietnam Africa Cooperation