By Peter Onyeri is a contributing public affairs analyst for USAfrica magazine (Houston), USAfricaonline.com, and projects specialist
Great political economists and thinkers like Adam Smith (in the 18th century) and David Ricardo (in the 19th century) recognized international trade for the exchange of capital, goods and services across international borders as central to nation building and political power. Besides providing nations with the opportunity to access goods and services not readily available in their own countries or which ordinarily will be comparatively expensive in their own local markets, it can be a great tool of foreign relations, diplomacy and influence, as aptly captured by the revered Scottish man and father of modern economics, Adam Smith in his book, Wealth of Nations.
International trade is so inextricably interwoven with nations’ and global socio-economic peace and stability that it is a key subject matter of interest to such critical global bodies like the United Nations, the World Bank, Organization of Petroleum Exporting Countries, OPEC and the International Monetary Fund, IMF. Originally set up after the Second World War through negotiations under the General Agreement on Tariffs and Trade, GATT, the successor WTO still exists to manage the complex intricacies involved in international trade through rules of trade between nations. Facilitated essentially through all sorts of complicated agreements and treaties between nations principally driven by diplomacy in foreign relations, it is too critical to be ignored. Trade, international trade is about big business, a potpourri of high wire international intrigue and power play that mirrors a nation’s economic power and influence in the comity of nations.
Not to have a body like the WTO, given the scope and impact of the business of trade is to invite global anarchy. And that is the Zurich-Switzerland based organization the Nigerian- American Dr. Ngozi Okonjo-Iweala, “Dr.Ngozi” as she recently informed the world media to be addressed as, is stepping forward to lead. Expectations are therefore at fever pitch for how this woman of substance and destiny will step out of the block. Like the economic pragmatist that she is, she had already indicated at how her compass is set.
In many of the press conferences she had granted to the world media especially after her confirmation on the 15th of February 2021, she had made it clear that her immediate goals are to tackle the global health disruptions and challenge posed by COVID 19 for international trade. She also indicated that she would be restructuring the WTO for the challenges of the emerging global economy. . Brilliant start that will be, no doubt, because a health-challenged person or world can neither operate efficiently nor optimise its potentials. “A very top priority for me would be to make sure that the WTO can make vaccines, therapeutics and diagnostics accessible in an equitable and affordable fashion to all countries”, she told Reuters. Rightly believing that the WTO needs to be strong and able to face the numerous challenges of international trade in the new digital economy, she further told the press that “a strong WTO is vital if we are to recover fully and rapidly from the devastation by the COVID 19 pandemic”. And she pointedly advanced the argument for the business side of safety when she further told the media that “COVID-19 Vaccine is not just a moral imperative, it is a strategic and economic one “
She was again correct in proposing to embark on reforms in the WTO to be able to leverage the advantages inherent in the emerging digital economy. Modern business including international trade is increasingly going to be dependent on AI, IoT and Machine Learning for improved efficiency and productivity. While it is acknowledged that these will never replace humans, better technology and lower labour costs help bring down the cost of finished goods.
Most African countries are majorly dependent on petroleum oil and one or two other minerals and raw material for its export trade. Robust international trade to generate revenue and improve their economies are lacking leaving many countries in Africa poor and classified as under developed. In many African countries, there are always trade imbalances arising from inadequate capacity to generate and export finished goods and services. While there are typical challenges common to African countries in varying degrees, Nigeria with the highest GDP in Africa at 448.1 billion USD has debilitating cultural challenges that encourage systemic corruption, disease and conflict. There are also challenges in the ease of doing business and a pervasive lack of credible and reliable data for effective planning. There certainly has to be a paradigm shift if Africa has to benefit maximally from the vision and new direction Dr. Ngozi is going to push in the WTO. She had actually earlier advised as much by advocating reforms and diversifying the economies of Nigeria in particular and Africa in general. There is no doubt that she plans to assist Africa as much she could, and she has repeatedly said so But is Africa ready?
The new world order and emerging global economy is going to be challenging for Africa and Dr. Ngozi has urged African countries to restructure and diversify their economies into other areas such as manufacturing, tourism and the creative arts. She had indeed tested these ideas in Nigeria when she was in charge of the economy as minister but sustainability of implementation may have posed challenges.
Competition is going to be high and Africa has to come to terms with the new reality, especially in the face of the dwindling influence of oil, so as not to compound the problem of unhealthy trade imbalances with the rest of the world. Nigeria’s main trading partners are India, China and the United States and it has trade agreements with a number of countries in Africa, the Caribbean, the Pacific and the European Union. It currently has 24 Duty Free Zones and 8 more are under construction.
Nigeria with its huge market population of over two hundred million people and large petroleum and raw material resource base is clearly the economic hub and giant of Africa. It certainly has the potential for better economic statistic if it operates strategically to put the right people in a right structure and systems. There must be alignment of the critical success drivers at the global, regional and local level for a clearly defined vision, mission and objectives. The strategies to be engaged must be anchored on well articulated insights into the current realities and opportunities.
It must see this as a project and approach it as such if it wants to have a good scorecard of desired results by the time Dr. Ngozi completes a renewable term of office in August 2025. .
Africa therefore needs to rapidly transform to embrace new technologies that align with the emerging trends in order to optimize the changes that are being proposed in the WTO. Education and capacity building will be a big factor in this. Dr. Ngozi is expectant that Africa will embrace this change. The objectives we want to achieve from Dr. Ngozi’s presence at the WTO must be clear to us.
Beyond diversification, there must be tasking for results that must be strategically targeted and pursued for desirable outcomes in a project philosophy.
The economies of strong nations are driven by projects and programs that create a necessary resilience and value for their sustainability. This is what Singapore did under their visionary leader Lew Kwan Yu to transform the then seriously encumbered Singapore from a third world nation to a first world prosperous resilient one. Rwanda in Africa is also toeing the same path of deliberate project-driven approach and the results are showing.
The organized private sector and other critical stakeholders in project development must provide professional support to the relevant ministries of Trade and Investments, Finance and Foreign Affairs in a collaborative effort to deliver on what should be seen as Agenda 2025. Renewed attention must be directed at the huge opportunities inherent in such initiatives as African Continental Free Trade Agreement, AfCFTA and the Aviation Open Skies Agreement. So also are the current efforts at concessioning out critical national infrastructures that will support trade.
Despite all of the current security challenges, Nigeria is in its best position ever to emerge as a powerful global trading country, with Dr. Ngozi at the WTO as Director General, Amina Jane Mohammed at the World Bank as Deputy Secretary General. There is also Mohammed Barkindo at the OPEC as Secretary General and Dr. Akinwumi Adeshina at the African Development Bank as President. Nigeria’s foreign relations and diplomacy under the unassuming Columbia and Cambridge trained Geoffery Onyeama is probably seeing its finest moments for big international trade that could birth the long awaited renascent Africa.