THE Director-General of the World Trade Organisation (WTO) and Nigeria’s former Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, has cried out that trade growth within Africa is being hindered by a high tariff, which she put at 435 per cent.
Okonjo-Iweala condemned the high tariff, and the general high cost of doing business in Africa as detrimental to the continent’s transitioning into the African Continental Free Trade Area Agreement (AfCTA).
The WTO chief spoke on May 5 in Nairobi, Kenya, at a high-level trade integration meeting themed, ‘Unleashing the Continent’s Potential in a Changing World.’
She mentioned the high tariff as one of the reasons for the low trade volume among African countries, which stands between 13 and 18 per cent, while other blocs like the European Union have achieved 60 per cent internal trade activities.
“Cost of trading within and outside Africa is too high with tariff hanging on 435 per cent and 350 per cent respectively. If this is not addressed, it will be difficult to actually use a good implementation of AfCTA,” she said.
Okonjo-Iweala further said that some countries depended on the tariff as a significant source of revenue, expressing worry that the development posed a challenge to AfCTA implementation.
She stressed that the AfCTA should, apart from the high tariff, address other concerns of barriers of trade such as delay of trucks in communities, and customs procedures that delay issuance of African Union passports to aid the movement of people, and should as well facilitate ease of doing business.
According to Okonjo-Iweala, “the World was suffering multiple shocks, ranging from the aftermath of the COVID-19 pandemic to the Russia-Ukraine crisis, which she pointed out had caused the global supply chain to exhibit signs of vulnerability and had intensified the need to strengthen regional trade and integration.”
An economist and former Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, said African leaders should, indeed, look at intra-African trade and remove bottlenecks against trade.
Yusuf observed that weak trading among most African countries had contributed to poor economic development of the continent.
“Intra-African trade is weak. We have the ECOWAS protocol and trade liberalisation but some of these are violated. We have a lot of non-tariff barriers, and movement restriction is dragging down trade facilitation,” Yusuf.