Economic, bilateral ties top agenda in Osinbajo proposed visit to Vietnam

Africa lacking among country’s trading partners Opportunities beckon for Nigeria’s economy, businesses

ECONOMIC AND BILATERAL TIES are to top the agenda of discussions between Nigeria and Vietnam, when Vice President Yemi Osinbajo undertakes an official visit to the South-East Asian nation later in the year.

The country, with 70 percent ease-of-doing business ranking as of 2020, is ranked in the developing/emerging country group with a lowermiddle income economy, with nominal gross domestic product (GDP) in excess of $355 billion and a purchasing power parity of $1.142 trillion in 2021.

With a population of 97.46 million by 2019, and an unemployment rate of 3.3% by 2020, the economy of Vietnam is a socialistoriented economy, which is the 36th largest in the world as measured by nominal gross domestic product (GDP) and 23rd largest in the world as measured by purchasing power parity (PPP). Vietnam is a member of the Asia-Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASEAN) and the World Trade Organisation (WTO).

Although Nigeria is clearly bigger than Vietnam in terms of GDP size (at over $470 billion), the Asian nation is far healthier than the African top oil producer, which currently grapples

severe insecurity challenges and soaring unemployment, which stood at 33.3 percent by quarter four of 2020. Vietnam has a national unemployment rate of 3.3 percent by 2020 and youth unemployment of 6.9 percent as of 2019.

Since the mid-1980s, through the Doi-Moi reform period, Vietnam has made a shift from a highly centralized command economy to a mixed economy that uses both directive and indicative planning through five-year with support from an open marketbased economy. Over that period, the economy has experienced rapid growth. In the 21st century, Vietnam is in a period of being integrated into the global economy.

Almost all Vietnamese enterprises are small and medium enterprises (SMES). Vietnam has become a leading agricultural exporter and served as an attractive destination for foreign investment in Southeast Asia. In the current period, Vietnam’s economy relies largely on foreign direct investment to attract capital from overseas to support its continual economic rigour.

Foreign investment in the luxury hotel sector and resorts is expected to rise to support the high-end tourism industry.

A forecast by PricewaterhouseCoopers (PwC) in February 2017 said Vietnam may be the fastest-growing of the world’s economies, with a potential annual GDP growth rate of about 5.1%, which would make its economy the 20th-largest in the world by 2050. The country has also been named among the Next Eleven and CIVETS countries.

However, despite economic achievement following Doi Moi, there exist issues that cause many analysts and researchers to remain worried about the economic slowdown in the country in recent years.

Sources within the Nigerian presidency told Business A.M. that Osinbajo’s visit to Vietnam would offer Nigeria the opportunity to strengthen bilateral and economic ties with the Asian nation. The visit is scheduled for sometime in the third quarter this year, this paper learnt.

In particular members of the Nigerian business community with close ties to the South-East Asian country confided in Business A.M. that the trip offers opportunities in the areas of trade, commerce, industry, service and investment collaboration as sectors of immediter ate benefit.

Business A.M. also learnt that strategies such as signing of partnership agreements and strategic collaboration contracts between companies and organisations on both sides are being considered for accomplishing the objective. A trade group said it will work out what it calls the “3-way strategy” for this purpose.

Presidency and Ministry of Foreign Affairs sources told Business A.M. that Osinbajo gave approval for the scheduling of the visit in May. The approval letter was conveyed to Geoffrey Onyeama, the minister of foreign affairs, via a letter dated May 21, 2021 and he, subsequently, sent it to the Asia Pacific department of the ministry for action. We understand the file is now being treated by the department.

Members of the business community with strong interest in Vietnam have been lobbying and anxiously looking forward to a highlevel Nigerian government visit to Vietnam to explore opportunities and strengthen business relations between both countries.

Business A.M. understands that the Nigerian Vietnam Chamber of Commerce and Industry (NVCCI) is looking at ways it could coordinate private sector participation during the visit.

The present trip by Osinbajo is a reciprocal visit to Nigeria undertaken in October 2019 by the deputy prime minister of Vietnam.

The various sectors of proposed economic collaborations between Nigeria and Vietnam are being activated by the NVCCI internal organs and committees. For instance, there is a proposal by the NVCCI agribusiness committee for collaboration in developing and commercialising raw cashew nut dryers to limit the problem of sharp drop in quality and quantity of the commodity in off-season periods.

Business A.M. was told exclusively that there is also a proposal being considered by NVCCI’s trade and commerce committee for developing a robust Nigeria-Vietnam online real time market to limit cost and time of doing business between the two sides.

Other similar proposals are being handled by other NVCCI committees, such as the capacity building committee that is looking into the prospects of setting up a first ever in Africa, Foreign Trade Academy, among others.

“All these require investment, based on strong Government to Government (G2G) understanding, state facilitated, official government support and enablement to implement,” a source in the business community said.

During the visit it is envisaged that concerned stakeholders on both sides will hold roundtables at official and private sector levels to work out strategies for realising mutual economic benefits.

The NVCCI, under the Federal Ministry of Foreign Affairs (FMFA) who have been put in charge of regulating the programme and should call an inter-ministerial panel meeting soon, perhaps this week, would examine the draft programme compiled for the private sector by NVCCI.

Meanwhile, statistics show that none of Vietnam’s major trading partners is in Africa. Some of them are: China, the United States, Japan, and South Korea. The country realised $290.4 billion in exports in 2018. Export products are: electronics, textile products, machinery, footwear products, transportation products, wooden products, seafood products, steel, crude oil, pepper, rice and coffee.