New dawn for continent as African steers world trade

19 Feb, 2021 - 00:02 0 Views
New dawn for continent as African steers world trade Africa has an opportunity to open new trade frontiers among member countries

The Herald

Ruth Butaumocho

African Agenda

The African continent on Tuesday carved its own piece of history when Nigeria’s Ngozi Okonjo-Iweala was elected to lead the World Trade Organisation, as its director-general.

She becomes the first woman and the first African to lead this 164-member organisation in the 73 years of the General Agreement on Tariffs and Trade (GATT), which later transformed to the World Trade Organisation.

A former Nigerian finance minister and World Bank veteran, Okonjo-Iweala shrugged off stiff competition from seven other candidates to lead the global trade body, which had gone for seven months without a leader.

For strategic reasons, the appointment could not have come at a better time for Africa, a continent that is hoping to consolidate its economic prowess, which is increasingly become too big to ignore following dramatic and positive economic strides in recent years.

With an anticipated economic boon following the operationalisation of the African Continental Free Trade Area (AfCFTA), the continent stands in a better position to lobby for an increase in its world trade share because it can now do so as one single unit and get a sizeable share. 

Africa was not able to successfully lobby for increased trade share before because of its fragmented trading policies, that could not be synchronised into one formidable platform, hence the formation of AfCFTA.

Through AfCFTA and the presence of an African leader at the WTO who understands the economic challenges and prospects for growth of the continent, the African Union (AU) can now successfully lobby for an observer status at the WTO. 

The African Union only has an ad hoc observer status, which is reviewed on a meeting-by-meeting basis. Because of its current status which only ensures partial representation at WTO meetings, the continent has not been able to carry fully African economic aspirations as a unit, while representing the desires of member countries.

By not having a full observer status on such a powerful economic platform, Africa was naturally disadvantaged over its relative lack of influence over decision-making compared with richer states.

Contrary to its mandate of promoting trade between nations, WTO has instead been fomenting disunity between the poor and the rich. 

Over the years, WTO has failed dismally to reduce the huge subsidies paid to first world rich farmers, whose overproduction continues to threaten the livelihoods of developing world farmers, especially in Africa.

The WTO has also been unable to protect the poor in developing countries by allowing governments to produce cheap medication because of its failure to clarify ambiguities between the need to promote public health or protect the intellectual property rights of big pharmaceutical companies.

Trade has also been in favour of rich nations.

In some instances, African countries were on several occasions forced to eliminate tariffs of up to 90 percent of their trade because there are no clear rules exist to protect them.

Okonjo-Iweala’s election should, therefore, curtail overfishing from the powerful nations and at least assist developing nations to push their goods across by ensuring that the WTO comes up with inclusive trade reforms that are mutually beneficial to all.

Africa has a lot to benefit from the election of Okonjo-Iweala apart from an enhanced diplomatic profile and validation of African women’s competency and leadership skills.

The continent should begin to see positive trade regulations that allow trading on equal terms without manipulation of least developed nations. 

WTO sets the rules for global trade and adjudicates in trade disputes between nations. It is also, according to its website, supposed to open trade for the benefit of all.

Availing trading opportunities on an open forum will work in Africa’s favour because the continent has got abundant natural resources, which it can use for poverty eradication and sustainable development. 

From the long held narrative that Africa is a hopeless continent, the continent is now an economic giant that needs to spread its economic tentacles across the globe in search of bigger and better economies for its people, than what is currently happening.

With its efforts in maintaining peace and security, a youthful population and abundant natural resources, Africa is emerging as a new global centre of economic growth that is increasingly sought after by the world’s biggest economies.

Even the decision by China to initiate the Belt and Road Initiative (BRI) was inspired by Africa’s scale of economic impact and is clearly affirmation that the continent has what it takes to become an economic giant, once it has proper infrastructural and structural support.

However, the structural support and institutional reforms have been hard to come by, especially within the WTO, which has seen Africa’s share of world trade remain at three percent over the years. 

That share of world trade s not reflective of the economic and trading activities happening throughout Africa.

Africa already has a position on how it wants to trade with the rest of the world. Being in possession of abundant resources does not mean that the continent wants to continue to be stripped off what it has. 

African member states feel that they stand to benefit more if they move away from exporting raw materials and instead focus on value addition, especially on their minerals.

Before she even walks into the office, Okonjo-Iweala’s plate is already full. 

With reports of a big slump in global trade as the effects of Covid-19 take toll, and the tariff wars between China and the United States, it is not going to be a soft landing for the former Nigerian finance minister.

It is within the same space where she is also expected to correct the historical trade imbalances and advocate for inclusive trade policies to ensure that developing nations will play in the same league as the rest of the world on trade and economic matters.

As she prepares to steer the ship in turbulent waters, Okonjo-Iweala’s vision on Africa should be guided by the popular Nigerian proverb that says; “No matter how dark it is, the hand always knows the way to the mouth.”

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