AFRICAN PRIVATE SECTOR UPBEAT ABOUT THE FUTURE BUT DEMANDS FAIRER AND MORE TRANSPARENT GLOBAL TRADING SYSTEM
Over 50% of CEOs believe global trade will increase over the next 12 months
A survey commissioned by the Pan-African Private Sector Trade and Investment Committee (PAFRAC) to gauge the private sector view around trade has highlighted the private sector’s desire for considerable reforms to make the global trade rules system fairer and more transparent.
Two hundred CEOs were surveyed around issues concerning the WTO and trade in general. It was done in light of the next phase of ongoing consultations to select the institution’s next Director-General.
Three of the eight candidates are African: Nigeria’s Ngozi Okonjo-Iweala, Kenya's Amina Mohamed, and Egypt's Abdel-Hamid Mamdouh.
The survey covered a number of areas that revealed a general consensus that the current rules penalize the African continent and its private sector. 86.6% of the respondents understand the role of the WTO in global trade.
However, a majority believe the WTO is not effective in fulfilling its role.
As much as infrastructure, logistics, and human capital were cited as two major constraints to growth in Africa, the CEOs also stressed the skewed international trade regime as another key constraint.
Prof. Benedict Oramah, President of Afreximbank said “As the pan-African trade finance bank, Afreximbank has been mandated to host the PAFTRAC secretariat. Any reform needs to support a burgeoning African private sector and an increasingly integrated Africa. We have seen, over the past quarter of a century since the WTO was formed, the emergence of a robust and dynamic African private sector, and more recently significant steps to integrate Africa under the African Continental Free Trade Agreement (AfCFTA). The WTO and its new leadership will need to recognise the imperative of African integration and put development at the centre of any trade agenda.”
Interestingly, if the majority of CEOs believed that the global trading system was unfair, most also see the multilateral system strengthening in the coming years. They outlined a set of reforms that should be undertaken for a fairer and more transparent trading system, including in the areas of voice and participation, tariffs and non-tariff barriers, agriculture and subsidies.
The CEOs were also optimistic about the future outlook: over 50% of CEOs believe global trade will increase over the next 12 months; and over 70% of CEOs believe intra-Africa trade will increase over the next 12 months.
Pat Utomi, Chair of PAFTRAC, stressed that unless reform was forthcoming the current global crisis may penalise the African private sector even further: “We have seen during this pandemic companies in the industrialised world have received massive bailouts, tax incentives, not to mention government contracts and fiscal stimuli. Companies in Africa were not so fortunate and will have to deal with a world where trade will be depressed because of the post-covid environment. As such, a fairer global trade environment and trading system are more urgent today than ever.”
The survey as well as a debate around a communiqué to be sent to all candidates who are in the race for the directorship of the WTO will be presented at a webinar taking place this afternoon, and hosted by the Afreximbank.