WTO chief says Africa is next growth frontier

Africa is the next growth frontier for the 21st century, the World Trade Organization (WTO) Director-General Pascal Lamy says and asks Kenya's President Uhuru Kenyatta to help promote further regional integration.


  However, to help realize its dream the Africa will have to fix “some key challenges” such as non-tariff barriers, poor infrastructure and energy, as well as corruption.
   "Africans today are more confident and hopeful in the future than ever before. This is also the great transformation that I have seen in the attitude of African negotiators in WTO, confident that trade, if coupled with domestic policies and Aid for Trade can be an engine for growth," Lamy said during a public lecture at the University of Nairobi on May 22.
  He said the pattern of trade was being transformed by increasingly sophisticated technology and innovations in transportation. Also, the landscape of actors is shifting to reflect new poles of growth, as North-South order of the 20th century is no longer clearly delineated.
   The outgoing WTO chief said Africa has since changed from the land of pessimism to the land of opportunity, and that there is no shortage of growth stories after travelling extensively in the continent in the last 20 years.
   "But what is spectacular about the debate on Africa today is the shift in perception. We see this renewed focus in the reporting from the mainstream media which has increasingly widened its traditional narrow reporting to spotlight the innovation and optimism of people on the continent and the growth trajectories of its countries," Lamy said.
   The outgoing WTO chief said Africa has a number of regional trade agreements, all of which aim to expand trade among its members.
   "These regional agreements can be complementary to multilateral trade opening, provided they are crafted in a coherent manner. Here, I must specifically applaud the East African Community (EAC) for its progressive regional integration efforts," he said.
   Lamy said the creation of a customs union and a common market, and the on-going discussions on a possible monetary union, was smart and economically robust decisions.   
   He said one only had to look at the 49 per cent increase in intra-regional trade since the launch of the EAC customs union to appreciate the impact, asking Kenya's President Uhuru Kenyatta to support an agenda of closer regional integration.
   Six of the world's ten fastest growing economies over the past decade were in sub-Saharan Africa (SSA), Lamy said, adding that Kenya, in particular, continued to be a leader in Africa, with projected growth this year of around 6 per cent.
   Lamy said five years into the global financial crisis, Africa as a region has shown great resilience, with an average growth rate of over 5 per cent over the last decade.
   "This is in contrast with the advanced economies, most of which are yet to fully recover from the economic downtown," he said.
   According to WTO's recently published the trade figures for 2012, world trade grew by just 2.0 per cent in 2012.
   "And this slow growth, should continue into 2013 where we are projecting trade growth of only 3.3 per cent, which is below the previous 20-year average of around 5 per cent," he said.
   The WTO chief said higher investment and savings, stronger export growth particularly resulting from the higher commodity prices, an improved legal, regulatory environment and overall macro-economic stability have contributed to Africa's rebound in growth.
   He said consumer demand by Africa's growing middle class is also an engine for growth for the continent.
   According to a recent World Bank report, consumer spending accounted for more than 60 per cent of sub-Saharan Africa's recent economic growth, which it forecast to accelerate to more than 5 per cent over the next three years, outpacing the global average.
   The WTO chief said Africa has also made remarkable progress in the area of political stability and governance, all of which are fundamental in enabling growth.
   Moreover, he said, the peacefully conducted general elections in Kenya and a number of other African countries are a sign of maturity in political democracy in the continent.
   Lamy said the real challenge for Africa lies in sustaining the growth process, enabling it to reach its full potential and ensuring the growth is inclusive.
   He said widespread and sustained poverty reduction -- which is in effect the ultimate aim of growth and development -- is only possible if the domestic policies are in place to ensure that the deliverables from this success story translate into real impact on the ground.
   Trade, he said, was one of the strategies that can be exploited to solidify and enhance the growth prospects for the continent.
   The recent African Union decision on boosting intra-African trade and moving forward on the Continental Free Trade Area are testaments to the political attention being given to trade as a real engine of growth in the continent, he said.
   Lamy said a particular challenge for Africa will be to ensure that smaller firms, which make up the vast majority of the private sector in Africa, can also join in value chains.
   The WTO chief, who is due to leave office at the end of August, said Africa is a diverse continent and this diversity should be harnessed in its development agenda, urging the continent to learn and build on each other's positive experiences in crafting models of development. (Xinhua)

 

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