who does the cap fit?: An African at the helms of global Trade would be beneficial for its free trade insticts.

 

Mrs. Okonjo-Iweala and Mrs Mohamed

The world is on the lookout for who would be the next DG of WTO.  Although, Africa accounts for two percent of worldwide trade. Yet by early November, it's perfectly plausible that the pinnacle of the planet Trade Organization is an African.                                                   

For the world’s poorest continent, this may be a milestone. It might come at a time when much of the globe is popping removed from trade, but when Africa itself is showing more commitment to trading its answer of poverty than at any time since independence.

Although the WTO director-general’s powers to influence global national trading policy are limited, the platform would give Africa an opportunity to deal with, a minimum of rhetorically, a number of the iniquities of the planet trading system that hold it back.

These include the large agricultural subsidies in Europe, the US and Japan that have discouraged Africa, with its swaths of unused arable land, from planting wheat, cotton or sugar to export to the globe. Africa sometimes uses this as an excuse. Still, it spends an unacceptable $90bn importing food annually.

Hippolyte Fofack, chief economist at the Africa Export-Import Bank, points to tariff escalation, where higher import duties are placed on processed goods, as a disincentive for African exporters. These make it harder to flee what he calls the “stickiness of the colonial economy, which has locked Africa into exporting unprocessed raw materials”.

There are other explanations for being trapped in colonial trade patterns, including a politically connected business class that finds it easier to create money through arbitrage than production. Still, Mr Fofack says the tariffs help explain absurdities, like the US and India buying crude from Nigeria and African country only to export it in refined form back to Africa.

Having an African spotlighting such irrationalities at the WTO wouldn't be tokenism. In Amina Mohamed, Kenya’s culture secretary, and Ngozi Okonjo-Iweala, Nigeria’s former minister, Africa has two well-qualified candidates. Of the two, Mrs Mohamed has more trade experience. A lawyer by training, she chaired the WTO’s general council and as Kenya’s secretary of state she won praise for her chairing of the 2015 ministerial meeting in Nairobi that agreed curbs to agricultural export subsidies and a brand new deal on information technology.

Mrs Okonjo-Iweala has less trade experience, but more international clout, particularly within the United States where she is well-known and recently became a citizen. She also includes a well-financed campaign behind her, to not mention strong support from the Nigerian government, which muscled other prospective candidates aside to clear her path.

Whoever becomes the subsequent director-general — there are three other candidates — will do so at a time when the US and China are conducting a destructive trade war and protectionism is becoming more acceptable. Even Boris Johnson, prime minister of the United Kingdom, an erstwhile champion of trade, is reserving the proper to splash cash on strategic industries.

Africa goes the opposite way. This year, in spite of the pandemic, 54 African countries continued to talk over schedules and rules of origin agreements for the African Continental trade Area, which can now start formal operations next year. Tariffs on 90 per cent of products are move zero. Significant progress has been made on visa-free travel.

“It is well understood on this continent that trade is that the future,” says David Luke, who co-ordinates national trading policy at the global organization Economic Commission for Africa. Trade should be a more important source of revenue than remittances, investment or aid, he says.

A paltry 17 per cent of African exports are intra-continental, compared with 59 per cent for Asia and 68 per cent for Europe. Intra-African exports have the next value-added content. If that proportion were raised, Africa’s industrial base would improve and it might stand a far better chance of integration within the global supply chain. Neither a continental trade area nor more favourable trading rules are enough.

The continent, fractured into 54 countries — 16 of them landlocked — desperately needs better road and rail links, reliable power and much less procedure at borders. Only then can it attract investment of the kind that Volkswagen is modestly undertaking, with pilot car plants in Ghana, Rwanda et al. Having an African at the helm of the WTO might assist on the margins.

But whoever wins the position, Africa has to follow a method of replacing old extractive patterns of trade with ones that provide more jobs and income reception.