Hope rises for Nigeria’s non-oil trade with Okonjo-Iweala at WTO
Nigeria’s non-oil trade could be heading for a revamp with the emergence, Monday, of Ngozi Okonjo-Iweala as the new director-general of the World Trade Organisation (WTO).
Okonjo-Iweala, who is Nigeria’s former minister of finance and World Bank managing director, was appointed at a special meeting of the WTO General Council, following a selection process that included eight candidates from around the world.
Her antecedent as a negotiator speaks volumes of her capacity to navigate the affairs of WTO and deliver on her mandate for member countries.
With her leadership of the WTO, Nigeria stands at the threshold of history not only for the woman who has become the first female and African director-general of the global organisation but a unique opportunity for the country to get back to its glorious days of non-oil exports such as cocoa, palm oil, groundnut, coal, etc.
An indication of her prowess was demonstrated when, as a minister of finance during the Olusegun Obasanjo presidency, she negotiated the cancellation of Nigeria’s foreign debts. The debts have since then continued to pile up amidst dwindling economic fortunes.
Okonjo-Iweala is coming in to head the global trade at a time Nigeria’s economy, which relies heavily on oil export and revenue, continues to see the non-oil exports sector at its lowest ebb.
Figures from the National Bureau of Statistics (NBS) show that revenue from the non-oil export has continued to dwindle and faced with huge uncertainty.
In Q4, 2019, for instance, non-crude oil exports were reported at N1.1413 trillion or 23.9 percent of total trade, and N1.1383 trillion, representing 27.9 percent of total exports as at Q1, 2020.
But by September 2020, non-crude exports had slumped to just N154.578 billion from N185.734 billion as of August of 2020.
Though the latest low performance has been attributed largely to the impact of Covid-19 on the global economy, oil export has remained a constant source of huge revenue for Africa’s largest economy, as authorities persistently neglect the non-oil sector.
Ironically, Nigeria has large deposits of non-oil export resources that could favourably compete with oil in export revenue if well harnessed.
The World Trade Organisation member nations have, over the years, capitalised on these non-oil exports to build a vibrant economy for themselves.
Some trade experts have opined that with Okonjo-Iweala’s leadership, Nigeria would have an ample opportunity to right all the wrongs related to the lack of premium placed on non-oil exports.
“The growth of trade has gone hand in hand with the large expansion of the global economy that has resulted in increased living standards around the world and lifted hundreds of millions of people out of poverty in the developing world,” Okonjo-Iweala said during talks with a WTO delegation on her motivation and vision for the organisation.
“The WTO plays an essential role in world trade through mechanisms designed to foster transparency, predictability and stability in the Multilateral Trading System (MTS), monitor trade developments, promote exchanges and build trust. It also assists developing countries, especially the least developed and small economies, to boost trade through technical assistance and capacity building. Trade and trade policy have rightly become central to national development strategies,” she said.
From her assertions, Nigeria falls in the league of Nations with a large army of people living far below the poverty line and also in dire need of help from technical assistance that Okonjo-Iweala’s leadership of WTO is offering.
It is evident that poverty has eroded the moral fibre of the Nigerian youth, leading to a total breakdown of law and order in society. Armed robbery, banditry, kidnapping, terrorism and fraud have become the order of the day for youths who should otherwise be gainfully employed in the country’s non-oil sector production process and adding value to the country’s growth.
Okonjo-Iweala identified an area of failure in the activities of the WTO and assured that her leadership would inject fresh blood into the WTO which is expected to change the narrative both for the organisation and its member countries.
She believes the WTO can change the world, but first, it needs reform.
“In recent years, the multilateral trading system (MTS) has been going through difficult and challenging times. But, in my view, the world now needs, more than ever, a reinvigorated WTO,” Okonjo-Iweala said.
“The challenges facing the WTO did not start with the current pandemic. Since 1995, the negotiating function of the WTO has not produced many results and although there have been some successful agreements, key areas like agriculture remain stuck.
“The WTO appears paralysed at a time when its rule book would greatly benefit from an update to 21st-century issues such as eCommerce and the digital economy, the green and circular economies. Issues of women and trade and Micro Small and Medium Enterprises (MSMEs) are important to ensure greater inclusion. Bridging the digital divide to enable the Least Developed Countries and other developing countries to participate will be key.
“Improving compliance in transparency and notification may require Technical Assistance and capacity building for Members who lack resources to comply. There will be a need to improve the functioning of the regular bodies by standardizing best practices. The Secretariat must be strengthened to enable it better support Members in negotiations, implementation, monitoring and dispute settlement,” she said.
In an interview with the Brookings trade podcast Dollar & Sense, Okonjo-Iweala further elucidated the role of the WTO for developing countries such as Nigeria to advance their growth and economic stability.
“Trade is important to developing countries because trade is an instrument. It’s part of the arsenal of tools, if you will, with which a country approaches development. It’s an essential part of that. A good example is you can see in the East Asian countries how trade has been instrumental in the export-led growth strategies that have lifted hundreds of millions out of poverty.
“In the same way, looking at other developing countries for example on my continent, Africa, we looked at programs where we could actually help the country with what I might call ‘behind the border’ issues. How to increase investment, how to improve production and productivity of their output so that they could not only have goods they could trade within the country but also outside the country and earn the needed foreign exchange that many of them need in order to make their economies work better. So trade is an essential part. You produce goods to trade. You produce services these days also to trade,” she said.