Textile and garment exports to Africa: Modest value compared to potential

Vietnam is one of eight major textile and garment exporting countries in the world, but the value of textile exports to Africa is still quite modest. Photo: N.Thanh

South Africa, Nigeria, Kenya in great demand

According to the Trade Promotion Department (Ministry of Industry and Trade), Africa has a large population and high consumer demand while intra-regional production has not yet developed.

In many African countries, the textile industry is still underdeveloped despite having an abundant source of raw cotton. This continent will become a promising consumer market for textiles, leather and footwear products due to the improved income of the people, diverse tastes and fashion preferences.

Notably, African countries, especially South Africa, Nigeria, and Kenya have great demand for textiles, garments, and footwear.

Mr. Le Hoang Tai, Deputy Director of the Trade Promotion Department, said that although Vietnam is one of the eight major textile and garment exporting countries in the world, the export value of this group of goods to Africa is still quite modest.

Talking to a reporter from Customs News, a representative of the Vietnam Textile and Apparel Association said that in 2021, Africa will import US$0.05 billion from Vietnam of textiles and garments, down 80.77% over the same period in 2020.

Meanwhile this market exports to Vietnam US$0.01 billion of textiles and garments, down 85.72% over the same period in 2020.

“Vietnam can increase exports of textiles, garments and footwear to Africa because this item has competitive advantages such as lower labor costs than many Asian countries, while sewing skills are good and productivity and quality are high. Notably, in addition to exporting to this market, Vietnamese enterprises can consider the possibility of investing in some major markets in Africa to take advantage of cheap and available labor and raw materials for the production of textiles and garments to serve the needs of the host country and for export," said Mr. Le Hoang Tai.

From the perspective of textile enterprises, Ms. Nguyen Thi Tuyet Mai, Deputy Secretary General of the Vietnam Textile and Apparel Association (VITAS), said that despite being affected by the Covid-19 pandemic, the African market for Vietnamese textile and garment products is still very large.

The region's economy has grown rapidly in recent years, leading to an increase in people's consumption demands, including textile products. Meanwhile, there are now 43 of 55 African countries participating in the World Trade Organization (WTO), so these countries have gradually removed non-tariff barriers as well as reduced import taxes.

Another factor mentioned by Ms. Nguyen Thi Tuyet Mai is that people in many African countries have sympathy for the people and achievements of Vietnam's socio-economic development. This is also an advantage for Vietnamese goods and Vietnamese textiles and garments to increase market share in this region.

“Hopefully African businesses can participate in investing in stages in the green and sustainable production chain of Vietnamese fashion products for cooperation and development. In contrast, Vietnamese textile and garment enterprises can also increase imports of raw cotton from West Africa, Central Africa, as well as research and invest in production in African countries to take advantage of raw material sources of these countries,” said Mai.

Be careful to avoid being scammed

Although the export potential of Vietnam's goods and textiles and garments to the African market is still large, the representative of the Vietnam Trade Office in many African countries recommends that Vietnamese enterprises need to be cautious in trade with African partners. Transaction fraud has occurred. The subject accepts any import offer from a Vietnamese enterprise or the subject offers to export to Vietnam at a low price, then asks to pay a fee/deposit.

In addition, in cooperation with the enterprise in Africa, Vietnamese enterprises need to pay attention to business practices, time, and especially language so that they can adjust their plans accordingly.

Mr. Tran Hung Cuong, a representative of the Vietnam Trade Office in Nigeria, said that in exporting to Nigeria, the phenomenon of fraud in business transactions in Nigeria and in West Africa is still common.

The forms of fraud of the subjects are quite diverse, which can be fraudulent in bidding on the import and export of goods. Notably, scammers often sign export contracts for Vietnamese enterprises, and deliver 1-2 contracts on time with good product quality to create trust. From the third contract, the subject asked the Vietnamese enterprise to transfer a deposit of 30-50% of the contract value, appropriate this amount and not deliver the goods.

In addition, businesses also face difficulties in payment when most West African countries use a form of payment with a certain level of risk. Thorough verification of partners is necessary to avoid risks when signing export and import contracts. Businesses should also apply the form of payment of the irrevocable letter of credit, payment at sight (L/C), the representative of the Vietnam Trade Office in Nigeria said.

Mr. Cuong recommended in the case of payment in the form of a deposit, businesses should ask their partners to deposit 30-50% of the value for new and first-time orders; should not transfer money in any form when requested by partners such as brokerage fees, attorney fees.

With import activities to Vietnam, businesses need to conduct an inspection of goods in the host country before putting the goods on board or hire reputable inspection companies to ensure quality. In the first stage, enterprises should go directly to meet suppliers and supervise the purchasing and loading of goods on the ship.