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| Delegates at the workshop "African Continental Free Trade Area (AfCFTA): Opportunities and Challenges for Vietnam" on May 24 in Hanoi. (Source: Organizing Committee) |
The workshop is part of a series of activities to celebrate Africa Day (May 25), and reflects the African Union (AU) theme for 2023 as “The Year of AfCFTA: Accelerating the implementation of African Continental Free Trade”.
The workshop was attended by African Ambassadors to Vietnam, government officials, diplomats, policy makers, researchers and businesses from Vietnam, Africa and internationally...
At the Conference, delegates discussed the implementation of AfCFTA, regulations, terms, advantages and difficulties in implementing AfCFTA, as well as analyzed and evaluated the opportunities and challenges of cooperation between Vietnam and African countries when AfCFTA is completed, in order to find new approaches in 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 combined gross domestic product (GDP) of US$3.4 trillion.
The implementation of the AfCFTA will help deepen Africa's economic integration, attract investment, promote trade, create jobs, reduce poverty and bring prosperity to African countries.
Specifically, according to a 2020 World Bank (WB) report, AfCFTA could help Africa's FDI increase by 111%-159% by attracting cross-border investment thanks to tariff and non-tariff barriers exemptions, replacing regional and bilateral trade agreements with a single and 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 ratification of the first 22 African countries. To date, 46 African countries have officially ratified the AfCFTA Agreement. |
AfCFTA can create many new job opportunities with higher income, especially significantly improved job 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 deepen Africa's integration, African exports to the world will increase by 32% and intra-African exports will increase by 109%.
That means real incomes could rise by 9%, and by 2035, 50 million Africans would have a chance to escape extreme poverty.
Furthermore, the AfCFTA will not only help African countries achieve the United Nations Sustainable Development Goals (SDGs), but also the African Union (AU) Agenda 2063.
Vietnam and African countries have a traditional friendly relationship, always supporting each other from the struggle for national liberation to the cause of national development. Although the Covid-19 pandemic has 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 (food, coffee, tea, pepper, seafood) and processed products. Meanwhile, Vietnam imports from Africa mainly raw materials (cotton, cashew nuts, wood, etc.). Since the goods of the two sides are complementary, when the AfCFTA is implemented, it will be an opportunity for Vietnam’s competitive goods to penetrate more into the African market and vice versa.
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| Delegates said that Vietnam needs to identify new cooperation methods with Africa for sustainable development and common prosperity of both sides. (Source: Organizing Committee) |
Over the past decade, Vietnam-Africa trade has more than doubled, from just 2.52 billion USD in 2010 to 5.5 billion USD in 2022. With the advent of AfCFTA, Vietnam's trade with the African market will increase significantly.
In addition, investment by Vietnamese enterprises in Africa is also facilitated thanks to AfCFTA, specifically by reducing administrative procedures and tax incentives.
However, besides the opportunities that AfCFTA brings, it also poses challenges for Vietnam. For example, Vietnam has to compete more fiercely with other countries when penetrating the African market. In the new regional and international context, especially when AfCFTA is completed, Vietnam needs to find a new approach to cooperation with Africa for sustainable development and prosperity of all parties.
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