Business

What is behind Vietnam’s economic success story?

Published

1 year ago

October 15, 2024

The World Bank has forecast Vietnam will show the strongest growth out of emerging economies in Southeast Asia.

In a new forecast from the World Bank, Vietnam’s economic growth is expected to reach 6.1% by the end of 2024 and 6.5% in 2025.

Both forecasts are higher than what was estimated in April, with the increase in growth down to a rebound in manufacturing exports, tourism and investment, the report said.

This shows that Vietnam could have a bigger growth in 2025 compared to other emerging economies like Thailand, Cambodia, Malaysia, Indonesia and the Philippines.

“Vietnam certainly faces some serious challenges, not least the ailing domestic sector and over-reliance on the [foreign direct investment] sector, but compared to other Southeast Asian countries, its economic prospects remain bright,” Nguyen Khac Giang, researcher and visiting fellow at the ISEAS Institute, told DW.

What is driving growth?

Vietnam, like other Southeast Asian countries, relies heavily on foreign direct investment.

Between 2021 and 2023, FDI inflows into Vietnam, Thailand, Indonesia, Malaysia, Singapore and the Philippines averaged about $236 billion a year, according to the ASEAN Investment Report 2024.

As Western investors try to diversify away from China amid geopolitical tensions between the Washington and Beijing, Southeast Asian countries are becoming a top choice for foreign investment from the US, Japan and the EU.

Nguyen Khac Giang said Vietnam is taking advantage of those tensions.

“I think Vietnam can maintain its growth momentum due to its domestic advantage of a 100-million population with a rising middle class, while also optimizing the benefits of its geopolitical position in the great power competition between China and the US,” he said.

China has also been investing in Southeast Asia, with Beijing and Hanoi establishing their “comprehensive strategic partnership” in 2008.

‘China plus one’

Like China, Vietnam’s economic growth comes under the stewardship of a one-party system, with the Communist Party having complete controlover the state’s functions, social organizations and media.

“China is Vietnam’s biggest trade partner, but more importantly, it plays a crucial role in Vietnam’s manufacturing sector, as most of its inputs come from China. I don’t think that will change in the foreseeable future,” Nguyen Khac Giang said.

“China Plus One” is a global economic business strategy for investors to reduce sole reliance on market and supply chain operations in China, aiming to expand into other countries while maintaining presence in the Asian giant.

Countries in Southeast Asia are seen as suited alternatives.

Bich Tran, an adjunct fellow at the Center for Strategic and International Studies (CSIS), said Vietnam is a top choice.

“Vietnam is one of the top choices for many companies’ China plus one policy because of the geographical proximity and similar culture,” she told DW.

“For those who have been operating in China, moving to Vietnam is much easier, and dealing with the Vietnamese would be more familiar than dealing with Indonesia or Malaysia,” she said.

“That being said, Vietnam is much smaller than China, so it can only absorb a small number of companies who want to relocate. India, if they open up their economy, would have much better chance of competing with China than Vietnam,” she added.

Vietnam attracts Western economies

The US is Vietnam’s second biggest trade partner and largest export market.

In September 2023, Washington and Hanoi upgraded their diplomatic relations, signing a “Comprehensive Strategic Partnership for Peace, Cooperation and Sustainable Development.” Analysts say the agreement was largely to boost economic benefits.

The US is one of Vietnam’s growing list of strategic partners, including Australia, China, India, Russia, South Korea, and more recently France.

But huge investment from Washington is key to economic opportunities for Vietnam.

Apple, the US tech giant, was again named the most valuable company in the world this year.

Vietnam has become a key manufacturing location for the company, with Apple investing over $15 billion in the country in the last five years.

Apple CEO Tim Cook seen during a visit to Hanoi in 2024
© NHAC NGUYEN/AFP

Vietnam has low labor costs, and a young and large workforce, with 58% under 35-years-old, out of a population of almost 100 million, making the country an attractive bet for investment.

More structural reforms needed

However, strong growth is also encountering domestic issues. Although Vietnam has one of the fastest growing economies in the region, it has a poor reputation on corruption, political censorship, human rights and civic society.

Domestically, local small to medium companies are struggling to become as competitive as manufacturers exporting to international markets.

Prices are also increasing for essentials such as food production due to climate change events, such as the recent Typhoon Yagi. Vietnam faces frequent electricity shortages, and experts say it must increase the use renewable energy.

Sebastian Eckardt, a practice manager for East Asia at the World Bank, said structural reforms are needed.

“During the first half of the year, Vietnam’s economy benefitted from the rebound in export demand. To sustain growth momentum not only for the rest of the year but over the medium term, the authorities should deepen structural reforms, step up public investment while carefully managing emerging financial risks,” Eckard said.

Edited by: Wesley Rahn

Author: Tommy Walker (in Bangkok)

Business

IMO OPENS NEW ECONOMIC FRONTIER AS UZODIMMA COMMISSIONS NOVA BANK REGIONAL OFFICE IN OWERRI.

Published

2 days ago

December 16, 2025

Ekwutos Blog

By Prince Uwalaka Chimaroke
16- DEC- 2025

Imo State took another decisive step toward economic expansion on Monday, December 15, 2025, as Governor Hope Uzodimma formally inaugurated the regional headquarters of Nova Bank in Owerri, signalling the state’s growing appeal as an investment destination.

While addressing guests at the commissioning ceremony, the governor noted that deliberate reforms, sustained infrastructural development, and a more business-friendly policy environment have steadily repositioned Imo State to attract credible investors. He described Nova Bank’s choice of Owerri as a strategic endorsement of the state’s economic viability and long-term growth prospects.

Governor Uzodimma praised the Chairman of Nova Bank, Mr. Philip Oduozor, for his experience and leadership within the financial sector, assuring the institution of continued government collaboration. He added that the arrival of Nova Bank, alongside the recent establishment of Access Bank’s regional headquarters in the state, reflects increasing confidence by the private sector in Imo’s economic direction.

Reiterating his administration’s vision, the governor emphasized ongoing efforts to transition Imo from a largely leisure-based economy into a competitive commercial centre. He pointed to significant investments in road networks, security architecture, digital systems, power supply, and overall ease of doing business, while encouraging Nova Bank to expand its footprint in the state, including consideration of Owerri for its corporate headquarters.

In his remarks, Mr. Oduozor explained that Nova Bank, which began operations in 2018 as a merchant bank, has now secured a full commercial banking licence. He stated that the bank intends to play a critical role in financing small and medium-scale enterprises across Imo State and the wider South East region by improving access to credit.

The commissioning ceremony ended with a guided inspection of the new facilities by Governor Uzodimma and top executives of the bank, marking another milestone in Imo State’s economic transformation drive.

Business

Aliko Dangote Reacts to Reports that Donald Trump Is Unhappy With the Launch Of Dangote Refinery (Video)

Published

2 days ago

December 16, 2025

Ekwutos Blog

Alhaji Aliko Dangote, President of Dangote Refinery, has denied claims that U.S. President Donald Trump is displeased with the launch of the $20 billion refinery.

There were claims on social media suggesting that Trump’s recent threat to attack certain locations in Nigeria could be linked to Africa’s largest refinery.

Trump had threatened to strike terrorists targeting Christians at various locations in Nigeria, which led to the spread of various propaganda and social media reactions.

Addressing the press, Dangote said that the USA has been a major supplier of crude to the refinery, adding that the talk about Trump being angry over its establishment “does not hold water.”

“The US has been one of our major suppliers of crude, which is why when someone says Trump is not happy with our refinery, it’s not true,” he said.

“Trump is more than happy with our refinery, because on average for a year, we do not buy more than 100 million barrels from the US.”

Dangote also said Nigerians now have the option of buying high-quality, locally refined petrol at a cheaper price or opting for blended imported fuel at a higher cost.

Dangote stated that fuel importers could continue to incur losses while Nigerians enjoy more affordable petrol prices.

According to him, the availability of locally refined petrol gives consumers a clear choice between quality fuel sold at a lower rate and blended premium motor spirit (PMS) sold at higher prices by importers.

https://www.instagram.com/reel/DSR-Ew5glpI/?igsh=MWxwYWJxcXhoYm51MQ==

Business

CBN returns to S4 platform for N365 billion T-Bills Auction

Published

3 days ago

December 15, 2025

Ekwutos Blog

The Central Bank of Nigeria (CBN) has reverted to the use of its Scruples Securities Settlement System (S4) for the electronic submission of Treasury Bills auction bids, following a brief suspension after its initial test-run in November.

Ekwutosblog understands the system was suspended following a glitch, which has now been resolved.

The latest move comes ahead of a N365 billion Treasury Bills auction scheduled for Thursday, December 17 – 18, 2025, reinforcing the apex bank’s resolve to tighten controls, enhance transparency and improve price discovery in the primary fixed income market.

The bids are to be submitted on Wednesday, December 17, 2025, while successful bidders will be required to settle their obligations on Thursday, December 18.

Market participants see the decision as a signal that the CBN is pressing ahead with reforms despite earlier operational inconsistencies. According to Mr. Tajudeen Olayinka, CEO of Wyoming Capital Partners, the move signals a renewed push for transparency in primary market auctions as the apex bank advances fixed income reforms.

Auction Details: N365 billion across three tenors

According to auction guidelines issued last weekend, the CBN will offer a total of N365 billion across three short-dated tenors:

91-day bills: N100 billion
182-day bills: N100 billion
364-day bills: N165 billion

The auction will be conducted using the Dutch auction system, with bids to be submitted exclusively via the S4 web interface between 8:00 a.m. and 11:00 a.m. on Wednesday, December 17, 2025.

Each bid must be made in multiples of N1,000, subject to a minimum subscription of N50.001 million, while successful bidders are required to settle by 11:00 a.m. on Thursday, December 18.

Second attempt after November test-run

This December auction marks the second activation of mandatory S4 usage, following the first implementation at the November 20, 2025 Treasury Bills auction, when the CBN raised over N700 billion.

Although the S4 system was briefly suspended in subsequent issuances—where bids were routed through Money Market Dealers (MMDs)—sources close to the apex bank said the pause reflected a work-in-progress transition, not a policy reversal.

Nairametrics gathered that the CBN expects to conclude the reform process before year-end, after which S4 will become fully operational for all government securities.

CBN seeks visibility, not market takeover

Speaking at a Premium Times Academy workshop in Lagos recently, Mr. Zeal Akariwe, CEO of Graeme Blaque Advisory, said the CBN’s objective is real-time visibility, not a takeover of the control of the fixed income market.

“Did CBN take over? No. What the CBN wants is transparency and visibility over the market, not takeover. That visibility did not exist,” Akariwe said.

Akariwe, whose firm provides advisory services to CBN, stressed that the Securities and Exchange Commission (SEC) remains the statutory regulator, while the CBN’s actions are corrective measures to address structural weaknesses in the market.

Why transparency matters to CBN

Akariwe highlighted how loopholes in the old system enabled profit concealment. He cited cases where banks and pension funds routed bond trades through brokers to hide gains from regulators.

In one illustration, Akariwe said a pension fund holding a 10% coupon bond bought at N100 could sell via an intermediary at N120, allowing the N20 profit to be shared discreetly among parties without regulatory visibility. “The CBN says we can’t have this where we cannot see it,” he noted.

Concerns had earlier emerged over inconsistent use of issuance platforms, with some auctions conducted via S4 and others through MMDs. Akariwe acknowledged this but described it as part of a transition phase.

Beyond auctions, the S4 rollout aligns with Governor Olayemi Cardoso’s broader reform agenda, spanning financial markets, banking supervision, compliance, and FX reforms, aimed at embedding transparency-driven systems that outlast the current administration.

With the return to S4 for the December auction, the CBN appears set to make electronic bidding the new normal in Nigeria’s government securities market.