Ngozi Okonjo-Iweala, director general of the World Trade Organization, has said Africa needs to increase trade and investment in value-added goods and services to ramp up economic growth.
Okonjo-Iweala said this on Thursday at BusinessDay’s Africa Trade and Investment Summit, themed ‘Reimagining Economic Growth in Africa’.
“African businesses currently face trade costs equivalent to 354 percent tariff among the world’s cheapest. We need a supportive external environment and an open and predictable internal economy,” she said.
For intra-African trade, trade costs are equivalent to a 435 percent tariff and electricity, road, and other processes are only part of the picture, she said.
“Increasing trade and investment in value-added goods and services is necessary to accelerate growth and development across Africa,” she said.
According to the former Nigerian minister of finance, the African continent is underperforming as it accounts for only three percent or less of global trade.
“Our countries continue to export mostly raw materials and commodities instead of adding more value. To reimagine economic growth in Africa, we need to reimagine global trade and investment and I believe we have a window of opportunity to do so despite a global economic environment now marked by slow growth and increasing political uncertainty,” she added.
Okonjo-Iweala highlighted reasons the continent should reimagine economic growth.
She said: “In an aging world, Africa’s growing young population anchors the workforce and markets of tomorrow. Regional integration through the African Continental Free Trade area offers potential investors the prospect of a large and unified market of 1.4 million people and a much stronger base to export to the rest of the world.
“The rapid growth in services over computer networks; these sectors are creating major opportunities for tech-savvy people including fintech and women-only businesses.”
Okonjo-Iweala said more supply and value chains in Africa will make countries part of the mainstream of global production networks.
“Successful re-globalisation will boost growth, job creation and increase supply resilience. We already see it as companies asking suppliers to reduce cost and diversify risk but instead of making this process like China + Vietnam or China + India. We need them and we are telling investors to diversify to more places,” she added.
She said African countries need a supportive external environment, an open and predictable internal economy, adding that the African countries can deliver agreements that will be useful.
While giving a welcome address, Frank Aigbogun, publisher of BusinessDay Media, said Nigeria is at a crossroads and so is the rest of Africa. “But one interesting thing is that a good part of Africa is making steady progress and we would love to say that about the giant Nigeria”.
“Nigerians are at the point where they have gone about hearing about the country’s potential. What they want to see is the realisation of Nigeria. We must focus on what African countries must do and give hope to our people,” he said.
