VIETRADE - With the potential of abundant mineral resources and labour forces, preferential tax given by some African countries, more and more foreign investors including Vietnam are increasingly interested in this region.
In terms of investment in industrial sector into African, petroleum exploration and exploitation are notably areas of Vietnam. Until now, PetroVietnam has implemented 12 cooperation projects on petroleum with Algeria, Congo, Cameroon, Madagascar, Tunisia, Mozambic, Angola, Sudan with total registered investment of US$776.45 million.
Besides energy area, Vietnamese enterprises are gradually diversifying investment sectors in Africa. Vinashin Group has set up and operated a 100%-Vietnam-invested motocycle assembly factory in Mali. At the beginning of 2011, Viettel received an invesment license in Mozambic and currently has implemented activities on providing telecommunication infrastructure services. Most recently, FPT Corporation has signed a memorandum of understanding (MoU) with the 21st Century Technologies Company in Nigeria on cooperation in telecommunications, education and equipment manufacturing. Truong Thanh Furniture Corporation has just finished first training course for 21 African trainees at Dak Lak Province center. This activity is part of a memorandum of understanding (MOU) on workforce training, wood plantation for raw materials and processing plant development with the city of uMshwathi.
In agricultural sector, on 13 December 2011, Vietnam’s Prime Minister issued Decision No. 70/2011/QĐ-TTg promulgating the Regulation on several mechanisms, policies of agricultural cooperation with African countries during 2012 – 2020. Accordingly, Vietnamese enterprises which invest in production, trading in agricultural sector in Africa shall implement prevailing regulations on tax, fees, and charges; shall be allowed to borrow capital from the Vietnam Development Bank; shall receive and use the results of agricultural production models which have been invested in Africa by the Government for expanding, developing, applying in investment projects of production, trading in Africa; shall be allowed to use information from the agricultural database of Vietnam in Africa.
The Long Van 28 Company began cooperating with the Vietnam-Africa Agro-aquaculture Development Company (VAADCO) in studying Sierra Leone as a site for it to invest in rice production in 2006. Based on the results achieved by VAADCO, Long Van 28 announced in December 2011 that it would pursue the production of rice on 200,000 ha in the country and that it was seeking support from the Government of Vietnam. According to the company’s calculation, the growing area of rice in Sierra Leone can be 5.4 million tons per year, of which 4 million tons will be used for export.
Accoring to VAADCO, there are still many opportunities for Vietnamese enterprises to invest in Africa especially in agricultural sector. Many countries in this region are willing to pay high salaries for Vietnam’s agricultural experts and provide financial support for enterprises when they invest in this sector. As planned, on 29 December 2011, VAADCO sent a team of experts to Nigeria to survey certain locations there for wet rice cultivation. VAADACO has assigned its experts to produce five hectares of rice seeds by end-2012 to supply for 1,000 hectares of rice which the company will develop in 2013.
In addition to rice cultivation, aquaculture and agricultural processing are also areas creating profit-gaining opportunities for enterprises to invest. At present, some countries such as Sudan issues support policies for enterprises when they invest in these two sectors. The Vietnam Cashew Association said that some members wanted to invest in producing and processing cashew nuts in some African countries such as Côte d'Ivoire , Nigeria… Currently, there is no Vietnamese enterprises investing in Côte d'Ivoire, which call foreign investment in processing cashew. Local production of cashew nuts to hit 400,000 tonnes, but the capcacity reaches only 3%.
Regarding to the invesment from African into Vietnam, out of 91 countries and territories with FDI, Africa now has 6 countries with 13 projects, with the total registered investment of US$11.48 million, which are the Republic of Seychelles, Morocco, Nigeria, Guinea Bissau, Maurice and South Africa. Investment from African countries focuses on processing industry, manufacturing, wholesale and retail area, science and technology, accomodation and restaurant services.
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