Business
Okonjo-Iweala poised to reset global trade
By OBINNA EZUGWU
Dr. Ngozi Okonjo-Iweala is on the global spotlight. Nigeria’s former Minister of Finance and Foreign Affairs has officially become the Director-General of global trade body, the World Trade Organisation (WTO) – a network of 164 members and 25 observer governments – after a grueling campaign that saw her beat seven other candidates from across the globe, but which was ultimately capped by former U.S. president, Donald Trump’s attempt to stop her after she had emerged clear winner and most supported candidate for the trade top job.
For the 66-year old World Bank veteran who had a 25-year career at the Bretton Woods institution, rising to the position Managing Director, Operations and overseeing a-$81 billion portfolio, the talk is over, and the tough job of reforming global trade has begun.
Madam Okonjo-Iweala has her job cut out. And it will be a tough one. She’s coming at a time when confidence in global trading system is at lowest ebb, in part due to rising wave of nationalism and protectionism induced by a wave of migrations, as exemplified by Brexit. But more importantly the conflict between the U.S. and China, worsened by indifference among developing countries, and further compounded by the raging Coronavirus pandemic.
Ex-U.S. president Trump, whose defeat in the November 2020 presidential election, eventually paved the way for her emergence, had spent four years of his presidency in a fierce trade war with China, claiming unfair practices, currency manipulation, and even stealing of U.S. patents and copyright by Chinese companies.
The resulting trade war between the two leading global economies hurt global trade. WTO which Okonjo-Iweala now heads is tasked with the responsibility of managing these tendencies and rebuilding confidence. It’s a tough task. Since it came on board in 1995, the trade body has been accused of mostly serving the interest of rich countries, to the disadvantage of poorer ones. The former Nigerian minister is also now carrying the aspirations of her disadvantaged continent, Africa on her shoulders. With one of their own as DG, African nations are hopeful of better outcomes.
“She is not going there to carry out an African agenda; under her, Africa will not be relegated,” says former Nigerian Central Bank governor, Prof. Charles Soludo. “Africa as a continent is the least developed continent and needs a sort of preferential treatment.”
However, for a poor continent which still brings essentially raw materials to the table, these expectations may be far-fetched.
Regardless of the challenges, however, the Harvard educated developmental economist, many agree she comes prepared. And there are already silver linings. New U.S. President, Joseph Biden has promised to pull his country back into the global economy. The development of Covid vaccines mean that the virus’ worst days are over, even if administration of same so far remains rich countries’ affair.
Of critical importance, she comes as a skilled negotiator with an enviable track record as two times minister of finance in Nigeria. She has been behind practically every commendable economic feat achieved by Nigeria in the past two decades.
“We are confident in her ability to rebuild the World Trade Organisation and enhance global trade and economic development,” notes Africa’s richest man, Aliko Dangote.
Indeed, during her first tenure as minister, from 2003 to 2006, she spearheaded negotiations with the Paris Club that led to the write off of $30 billion Nigeria’s debt, including the outright cancellation of $18 billion, a major accomplishment of the Obasanjo government.
Within the same period, she led efforts to improve Nigeria’s macroeconomic management, including the implementation of an oil-price based fiscal rule where revenues accruing above a reference benchmark oil price were saved in a special account, the Excess Crude Account (ECA), helping thus, to reduce macroeconomic volatility.
Still, it was her who introduced the practice of publishing monthly FAAC allocation to federal government, states and local governments, an innovation that has gone a long way to increase transparency in governance. Yet, she was instrumental in assisting Nigeria to obtain its first ever sovereign credit rating from Fitch Ratings and Standard & Poor’s in 2006.
Her second stint as finance minister under Goodluck Jonathan, from 2011 to 2015, saw even bigger feats. In 2013, she established the Nigerian Sovereign Wealth Authority (NSWA) to save and invest part of the country’s oil revenue.
Again, with the help of the World Bank and the IMF, she built an electronic financial management platform, the Government Integrated Financial Management and Information System (GIFMIS), including the now touted Treasury Single Account (TSA) and the Integrated Payroll and Personnel Information System (IPPIS), both of which are helping to curtail corruption.
Her empowerment programmes remain the most far-reaching and most impactful till date. She came up with innovative ideas that achieved results, such as the Growing Girls and Women in Nigeria Programme (GWIN); a gender responsive budgeting system that helped to empower many women and youths.
She also initiated the largely successful Youth Enterprise with Innovation programme (YouWIN) which helped to create entrepreneurs in the country; a programme that has indeed been evaluated by the World Bank as one of the most effective programmes of its kind the world over.
Still, under her stewardship, the National Bureau of Statistics (NBS) carried out a re-basing exercise of Nigeria’s GDP) for the first time in 24 years, which saw the country emerge the largest economy in Africa. She, as well, made several efforts to rid the country of the unsustainable fuel subsidy regime. Sadly, however, she was frustrated by the then opposition and the subsidy cabal.
These accomplishments, of course, didn’t escape the prying eyes of the global community. And hardly had she left office following the defeat of Jonathan in 2015, when she was called up by the International Commission on Financing Global Education Opportunity.
Among other portfolios, she has also been co-chair of the Commission on the New Climate Economy, was in the World Economic Forum Young Global Leaders Foundation, the United Nations’ Secretary General’s High-Level Panel on the Post-2015 Development Agenda, among many others. Since 2019, she has been part of UNESCO’s International Commission on the Futures of Education, chaired by Sahle-Work Zewde, even as she is a member of South Africa’s Presidential Economic Advisory Council.
And in what was to be a final warm up for the WTO job, a few months ago, in June 2020, IMF’s Managing Director Kristalina Georgieva appointed her to an external advisory group to provide input on policy challenges. Indeed, her path to Geneva, Switzerland, headquarters of the Trade Organization is clearing by the day.
“She is the most qualified of all the candidates,” Soludo remarked while appearing on Arise TV last week. “She has all it takes to navigate the various landmines laid by the various competing world economic powers; China is the big elephant in the room.”
On her campaign trail, the new DG consistently espoused her belief in trade’s ability to lift people out of poverty, insisting last week Monday that, “What it (the WTO) needs is someone who has the capability to drive reform, who knows trade and who does not want to see business as usual. And that is me.”
Speaking at a press conference last week, she assured, “You can count on me to be proactive, balanced, fair professional and active.”
Confidence in her ability, across the globe, is not lacking. Christine Lagarde, @Lagarde, President of the European Central Bank (ECB), former Chair and Managing Director of the International Monetary Fund, notes her strong will and determination will see her succeed.
“I’ve known Ngozi for many years,” he says. “Her strong will and determination will drive her to tirelessly promote free trade to the benefit of people worldwide.”
Speaking to Reuters last week, former WTO chief Pascal Lamy, said she “brings stature, she brings experience, a network and a temperament of trying to get things done, which is quite a welcome lot in my view. I think she’s a good choice.”
Last week, China, second largest economy, in a statement by its Ministry of Commerce (MOFCOM) said, “Dr. Okonjo-Iweala has long been engaged in poverty reduction of developing countries, global vaccine and healthcare causes. She is also a seasoned manager in terms of international organizations.
“Her appointment commands public respect and support… The spread of the COVID-19 pandemic has not yet eased, and the multilateral trading system is facing grave challenges, but China has full confidence in her as the director-general of the WTO,” the ministry said.
“China hopes that the WTO will restore its normal functions as soon as possible after Dr. Okonjo-Iweala assumes office and the new director-general can promote the WTO in playing a greater
