New World Trade Organisation chief must cut better deal for Africa
Africa will continue to have a minuscule share of global trade — now sitting at about 2% — if the challenges of illicit trade, capital outflows to tax havens and skewed subsidies are not addressed by the incoming director-general of the World Trade Organisation (WTO).
These were my sentiments during a recent webinar hosted by the Pan-African Private Sector Trade and Investment Committee, in partnership with the AU Commission, Africa Business Roundtable, Afro Champions and the Pan African Chamber of Commerce and Industry.
The webinar was hosted against the backdrop of a fiercely contested race for the position of director-general of the Geneva-based WTO, an intergovernmental organisation that sets the rules for global trade and adjudicates disputes between nations.
Two Africans have made the final shortlist of five candidates, namely Ngozi Okonjo-Iweala, a World Bank veteran and former Nigerian finance minister, and Kenyan Amina Mohamed, a former minister who was also Kenya’s ambassador to the WTO.
Addressing the needs of development is non-negotiable for the new director-general. We submit that the issues of skewed subsidies, illicit trade and capital outflows that continue to leave our shores should also be priority areas the new director-general needs to address.
Working together with governments and multinational institutions, we believe if these matters are addressed effectively and sustainably, millions of poor people — particularly in Africa — will be lifted out of poverty.
There is a growing feeling among policymakers, governments and the private sector that the appointment of an African candidate may speed up the reform of this 25-year-old institution and help advance the interests of the continent.
This conviction has been reinforced by the creation of the African Continental Free Trade Agreement (AfCFTA), envisaged to become the world’s largest free trade area. The implementation of this agreement has been postponed because of the coronavirus pandemic.
By reforming their trading regulations, the WTO and other institutions of global governance would gain much in terms of legitimacy while simultaneously improving the happiness indices of many countries in the world.
The movement in that direction is not only possible but also desirable for millions of people around the world. It will also help humanity ameliorate the impact of the Covid-19 pandemic, whose far-reaching socioeconomic effects are yet to be fully felt in many countries.
If the new director-general cannot drive these much-needed reforms and review some of the trade regulations that constrain development in Africa, whoever is appointed will not deserve this position.
Though the current global regulatory regime is biased in favour of developed countries, Africa is also partly to blame for the woes it is facing. We are our own worst enemy. For example, the contractual agreements we enter into with other countries do not serve our best interests, particularly when it comes to bilateral agreements.
There are also a number of issues we have to address to reclaim our space. For example, what share of the revenues do we get from the value chain, such as shipping liners, when we extract minerals from the ground?
When I transport manganese from the Northern Cape to Port Elizabeth for shipping, I get paid in dollars and not our local currency. The revenue is not even paid in SA, but from Singapore by trading companies that ply their trade on commodities from Africa. Yet none is based in Africa.
These are the sort of things we need to look at. The new director-general needs to level the playing field, create a regulatory environment that enables Africans to beneficiate their raw materials and protect their own farmers, just like Europeans do.
It is time for Africa to determine the prices of its minerals and not simply be content with being a price taker. The continent has all the minerals required for infrastructure development and should leverage this position to negotiate more suitable terms.
Any form of infrastructure development requires steel and raw materials that can be found in Africa. The components for lithium batteries, namely vanadium, chrome and platinum, are also found in Africa.
This is a powerful bargaining chip we can use to change the contracting methodology, especially with countries such as China and regions such as Europe. The former is on a developmental drive, and the latter faces the challenge of ageing infrastructure.
• Mashile-Nkosi is executive chair of Kalagadi Manganese.
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