Home ›› 31 Oct 2021 ›› Front
Bangladesh can tap into the vast trade potential in African countries by investing in manufacturing, especially in pharmaceuticals, apparels, and agriculture, speakers told a seminar on Saturday.
Addressing a virtual seminar titled “Trade and Investment Cooperation of Africa and Bangladesh: Towards a new trajectory” on the fifth day of the Bangladesh Trade and Investment Summit 2021, they also emphasised removing trade barriers to improve bilateral trade between Bangladesh and African nations.
“The demand for low-cost agro products is high in Africa, and around four million Bangladeshis can be employed in different sectors, especially in agriculture, for contract farming of these products,” said Dhaka Chamber of Commerce and Industry President Rizwan Rahman in his keynote.
He said Bangladesh-Africa joint ventures could be established in pharmaceuticals, apparels, real estate, construction, footwear, energy, agro and food processing, degradable packaging, light-weight manufacturing, ICT, and telecommunications.
But the lack of bilateral or multilateral trade deals, such as free trade agreements (FTAs) or preferential trade agreements (PTAs), between Bangladesh and African countries was hindering business relations, he said.
“Last year, the intra-African trade volume was $133 billion, and it was heavily influenced by the African Growth and Opportunity Act (AGOA) and the Common Market for Eastern and Southern Africa (COMESA). Our trade with Africa is significantly low compared to other regions,” he added.
He further said Bangladesh exports to only five to six countries in Africa.
“Their high import tariff is an obstacle to increasing exports. But the service sector has potential for investment.”
Bangladesh-Africa trade relations
The annual bilateral trade between Bangladesh and Africa is about $1.5 billion, with the former having a positive trade balance, Rizwan said in his keynote.
African exports to Bangladesh are dominated by cotton (45 per cent). Besides, Bangladesh’s exports to Africa account for 1.02 per cent of the country’s total exports.
With a legacy of friendly diplomatic relations with African countries, Bangladesh is negotiating to sign FTAs or PTAs with South Africa, Morocco, Egypt, and Senegal.
African investment in Bangladesh stands at $306 million.
Opportunities
The DCCI president said, “We can set up a project to support export integration and entrepreneurship development in order to increase trade between Bangladesh and Africa.”
Bangladeshi investors can invest in AGOA and expand exports to the US market, he said.
Square Pharmaceuticals Director Muhammad Zahangir Alam said Africa mostly depends on imported medicine.
“In the last 10 years, we saw very positive growth in Africa. Bangladeshi pharmaceutical companies and a few others are planning to invest in Africa and the Sub-Saharan region,” he said.
“Investing in Africa will increase our confidence in overseas investments as they are very welcoming and positive,” he said, terming it a new window for Bangladesh.
UniMed UniHealth Pharmaceuticals Managing Director M Mosaddek Hossain said, “Bangladesh’s pharmaceutical exports stand at $170 million, which has the potential to reach up to $1 billion. The generic pricing of generic pharmaceutical products is a challenge for Bangladesh.”
He said there are huge opportunities for setting up joint ventures with African investors. “In the next 10-12 years, Africa will be a $50 billion market.”
Trade challenges
The lack of direct flights has increased challenges in trade between Africa and Bangladesh while the absence of embassies of many African countries in Bangladesh also impacts bilateral communication, speakers noted.
The limited foreign exchange supply in many countries of Africa is another challenge in trade.
Steps to move forward
Speakers said direct flights could be introduced with African countries that Bangladesh has trade relations with.
They said African businesses could set up joint ventures with Bangladeshi entrepreneurs for low-cost production and export to Africa.
Planning Minister MA Mannan said the private sector needs to be aggressive to invest both at home and abroad.
He said food processing and agriculture have good prospects in Africa, and Bangladesh needs to grab that market.
The minister said Bangladeshi entrepreneurs were now entering the African market, suggesting more investments be made there.
Director General of the Africa wing at the foreign ministry Md Tarikul Islam said Africa is a resourceful region having enormous potential.
He said African investment in Bangladesh is not remarkable due to their restrictions on foreign investment.
“But textiles, pharmaceuticals, footwear, apparels, leather, paper and pulp, shipbreaking, and agriculture are some of the sectors in Bangladesh that they can invest in. The visa processing for African investors will be eased,” he added.
