Who is Doctor Ngozi Okonjo-Iweala
Okonjo-Iweala is a Nigerian career economist having served at the world bank for almost 25 years reaching the position of number two in her peak (managing director of communications). As a teenager she gained her economics degree at Harvard University where she graduated Magna Cum Laude (student with the highest marks) and studied her PHD in economics at the Massachusetts Institute of Technology (MIT). She served as the minister of finance in Nigeria under President Olusegun Obasanjo (2003-2006) and under President Goodluck Jonathan (2011-2015), noted as times of relative financial stability in Nigeria. She gained widespread popularity for her humbleness and general outspokenness. Her campaign as the President of WTO though officially endorsed by President Buhari lacked resources. She made an open call in July for volunteers as ‘she has no money for a PR firm’ creating a cult following among young educated Africans.
What is the importance of the WTO in Africa ?
The World Trade Organisation (WTO) is an organisation that monitors and regulates the international trade of all countries of the 164 member states. The key role involves dispute resolution and monitoring the trade tariffs between the member states. All the countries are held to the ‘World Trade Facilitation Agreement’ (TFA) which sets the standards of equal trade and ensures less developed countries do not get excluded from drops in tariffs. The goal of the WTO is to increase worldwide trade liberalization which in the long term will increase global GDP as each country is able to exploit their comparative advantage. A comparative advantage is a good or service from a country developed at a lower opportunity cost. A good example of this is copper production in Zambia as we simply have more high concentrations of copper deposits. This creates the advantage in mining and copper accounts for 70% of all exports.
As of the MPC meeting we have a current account surplus of $605 million, largely because the majority of consumers cannot afford to purchase imports. This has also led to a boom in our manufacturing areas as giants like Tradekings, Zamgold and Parrogate are beginning to export goods and dominate the surrounding markets. The largest benefit creating a comparative advantage in that sector are the substantial cheaper wages in our region. The average per capita income in Sub Saharan Africa is $360 lower than it was in 1960.. The Zambian manufacturing industry has been booming recently with an average growth rate of 30% annually (Economist). These are outstanding numbers considering China grew by an average 9% over the last 10 years and declined by 15% this January. Indias rate increased by an average 4% over the last 10 years.
The Trump Problem
In late October the Trump administration was the only large country to attempt to block her ascension into the WTO. The US used what is regarded as the most powerful Veto authority in Africa in order to prevent her ratification as scheduled for the 9th of November despite 163 WTO member states supporting Okonjo-Iweala’s appointment as she was due to be the first woman and the first african to take the position. The US argued that the organisation needs to be led by “somebody with real, hands on experience in the field” arguing that the South Korean candidate Mrs Yoo Myung-hee had the necessary experience.Despite the likely racially motivated vito (against all tradition as Trump has done many times before) shows the ineffectiveness of the organisation. It has been years since the last multilateral trade deal has been concluded as Trump regularly criticized the organization for its links with China and their supposed favoritism.
What can she do?
The Biden administration has already agreed to accept her ratification so it is unlikely her role will be withdrawn. But with regard to changing the fortunes of Africa, what the US has shown is the WTO is still subordinate to the world leaders in the Western world. We can hope that with the right implementation; certain trade restrictions that have kept certain products (particularly African) from competing fairly on the world stage could be exploited. Hopefully with the vision of the AFTCA coming into to command in January having a head of trade who understands Africa’s trade issues in depth at the head of the WTO is something which can prove to be a blessing