Africa “Firsts” in Multi-lateral Trade and Finance
The Continent scored two firsts in the world of multi-lateral trade and finance in February.
First, Nigerian-born Ngozi Okonjo-Iweala was finally approved as Director General of the World Trade Organization (“WTO”) in Geneva, the first African to be named to the post (as well as the first female). Ms. Okonjo-Iweala had previously been a Vice President at the World Bank and served as Nigeria’s Finance Minister twice, from 2003-06 and 2011-15, and widely credited as bringing more transparency to Nigeria’s public finances as well as helping restructure the country’s debt position during her first term.
Later in the month, Makhtar Diop of Senegal was named the head of the International Finance Corporation (“IFC”). Mr. Diop is a former Senegalese finance minister and the IFC’s first African leader, coming to the institution after a long career at the World Bank.
The appointments come at a critical juncture for both institutions in the wake of resurgent nationalism globally and fears of increasing inequality, exacerbated by the Covid-19 pandemic. At the WTO, Ms. Okonjo-Iweala has already expressed desire to realign the WTO with its original purpose of raising living standards globally and to bring the organization’s “…outdated rule book up to date at a time of accelerating change.” Mr. Diop has already signaled similarly sweeping ambitions by reiterating a long-standing critique of the IFC to have a greater presence on the ground. He has already publicly supported the institution’s “big effort” to move more staff to in-country positions so they can work more directly with local stakeholders and better originate and support opportunities. Such a shift in staffing may also contribute to a lower travel and carbon impact of international deal-making.
The symbolic and practical impact of their respective appointments come at critical junctures for each institution’s ability to continue meaningful contributions to alleviating poverty across Africa. Ms. Okonjo-Iweala’s appointment will no doubt provide momentum for the newly launched African Continental Free Trade Area (“AfCFTA”), signed by 54 of Africa’s 55 African Union members but still facing significant challenges to reach scale and practical buy-in for its “single market” ambitions. At the IFC, Mr. Diop’s appointment can impact the institution’s comparatively smaller investment allocations to Africa. In the fiscal year 2020, less than 20% of the IFC’s investments were in sub-Saharan Africa, less than in both the Latin America and Caribbean region, and the East Asia and Pacific region.
While important steps forward for the Continent, time will quickly show whether they translate into practical contributions to these institutions ability to increase trade and investment facilitation there.
Sources: African Business, DevEx, Financial Times, Quartz