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| Delegates at the seminar "African Continental Free Trade Area (AfCFTA): Opportunities and Challenges for Vietnam" held on May 24 in Hanoi . (Source: Organizing Committee) |
The workshop is part of a series of activities commemorating Africa Day (May 25), and also reflects the African Union's (AU) theme for 2023: "Year of AfCFTA: Accelerating the Implementation of Free Trade on the African Continent".
The workshop was attended by African ambassadors to Vietnam, government officials, diplomats, policymakers, researchers, and businesspeople from Vietnam, Africa, and internationally.
At the conference, delegates discussed the implementation of the AfCFTA, its regulations and provisions, the advantages and disadvantages of its implementation, as well as analyzing and evaluating the opportunities and challenges for cooperation between Vietnam and African countries once the AfCFTA is completed, in order to find new approaches to cooperation between the parties.
When fully operational, the AfCFTA will be the world's largest free trade area, with a market of 1.3 billion people and a Gross Domestic Product (GDP) of up to US$3.4 trillion.
The implementation of the AfCFTA will help Africa achieve deeper economic integration, attract investment, boost trade, create jobs, alleviate poverty, and bring prosperity to African nations.
Specifically, according to a 2020 World Bank (WB) report, the AfCFTA could help increase African FDI by 111%-159% by attracting cross-border investment through tariff and non-tariff barriers, replacing regional and bilateral trade agreements with a single, unified agreement.
At the 18th Plenary Session in Addis Ababa, Ethiopia, in January 2012, African leaders decided to establish the African Continental Free Trade Area (AfCFTA). After more than 7 years of preparation, in May 2019, the AfCFTA Agreement came into effect with the initial ratification by 22 African countries. To date, 46 African countries have officially ratified the AfCFTA Agreement. |
The AfCFTA could create many new jobs with higher incomes, and significantly improve employment opportunities for women.
By 2035, thanks to the AfCFTA, African women's wages will increase by 11.2% and men's wages will increase by 9.8%. The AfCFTA will help Africa integrate more deeply, with African exports to the world increasing by 32% and intra-African exports increasing by 109%.
This means that real incomes could rise by 9%, and by 2035, 50 million people in Africa will have the opportunity to escape extreme poverty.
Furthermore, the AfCFTA not only helps African countries achieve the United Nations Sustainable Development Goals (SDGs), but also contributes to the African Union's (AU) Africa Agenda 2063.
Vietnam and African countries have a long-standing tradition of friendship, always supporting each other from the struggle for national liberation to the process of national development. Although the Covid-19 pandemic caused a decrease in trade turnover between Vietnam and other regions, trade turnover between Vietnam and African countries still recorded positive growth.
Vietnam's main exports to Africa include industrial goods, agricultural products (foodstuffs, coffee, tea, pepper, seafood), and processed products. Meanwhile, Vietnam mainly imports raw materials (cotton, cashew nuts, wood, etc.) from Africa. Because the goods of both sides are complementary, the implementation of the AfCFTA will create opportunities for Vietnamese goods with competitive advantages to penetrate the African market more widely, and vice versa.
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| Delegates believe that Vietnam needs to identify new avenues of cooperation with Africa for the sustainable development and shared prosperity of both sides. (Source: Organizing Committee) |
Over the past decade, trade between Vietnam and Africa has more than doubled, from just $2.52 billion in 2010 to $5.5 billion in 2022. With the introduction of the AfCFTA, Vietnam's trade with the African market will increase significantly.
Furthermore, Vietnamese businesses' investments in Africa are also facilitated by the AfCFTA, specifically through reduced administrative procedures and tax incentives.
However, alongside the opportunities that AfCFTA brings, it also poses challenges for Vietnam. For example, Vietnam will face fiercer competition from other countries when entering the African market. In the new regional and international context, especially with the completion of AfCFTA, Vietnam needs to find new approaches to cooperation with Africa for sustainable development and prosperity for all parties.
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