IKENNA EMEWU
Director General of the Woeld Trade Organisation (WTO) and Nigerian international economist, Dr. Ngozi Okonjo-Iweala has advised African leaders to start thinking of foreign aids as things that belong to the past.
She made the call on the heels of the winding of the United States Aid for International Development (USAID) by President Donald Trump.
The former Nigerian Finance Minister an Coordinating Minister for the Economy spoke at the just-ended African Union summit of heads of government in Addis-Ababa, Ethiopia.
The 38th Summit ended on February 16.
At the sidelines, Okonjo-Iweala told the media that “as the head of WTO, I know that we don’t need foreign aid. We need start thinking of access to foreign aids as a thing of the past.
Let us focus on two things to make us grow – attracting investment and mobilising our own domestic resources. These are actually the things ran through the presentations of almost all the leaders of the African countries at the AU.
I think African leaders are recognising the fact that ending foreign aid is a challenge and also an opportunity. This moning, we had a session with the multinational development banks of Africa. Along with President John Mahama (of Ghana), one of the things we talked about is how to better mobilise our local resources and invest in ourselves.
I pointed out that we have about $250 billion worth pension resources within the countries that could be invested. The pensions companies and corporations really need to look at their policies and see how to adjust the rules to invest more within the continent than investing outside.
From South Africa that has the largest stock of the money, to Nigeria, Morocco, Botswana, Kenya, Namibia we have large pool and this amount is a huge resource to rely upon.
We also have this list of development banks like the African Finance Corporation, Afreximbank that chairs the board of African multilateral financial institutions. We need to look at their resources and focus better on how to make the best use of them instead of looking outside.
The shareholders are African governments. They can target to capitalise them better to grow their balance sheet from the current $70 billion. However, considering that we have infrastructure deficit and need of more than $200 billion a year, you can see the capital base of these institutions are not enough and need to be boosted.
We have more than 84 national development banks which are different from the multilateral ones. How do we mobilise and capitalise them better to finance our needs?
In Nigeria when I was finance minister, we raised a diaspora bond of $300m that was quite successful. These are the types of instruments we can tap into, our own resources within us rather than looking outside.
There are so many creative and innovative ways through which we can raise resource and fund our projects and processes.
I want end by pointing out the reaslisation at the meeting that we have to add better value and monetise the mineral resources of the continent. Almost all the heads of state are discussing large discovery of minerals such as lithium, manganese, copper, so many others needed in the manufacture of electric batteries and vehicles.
They abound in the continent, but the larger issue is how best we can attract foreign investments that will make them add value within Africa rather than mining them and processing somewhere and bringing back to us finished goods without adding value to us. We need to do these to create jobs for our people and help increase our trade with the world. The only way we can finance our economy is to trade more by adding value to our products.
At the WTO, we are trying to find out those factors that prevent us from trading more to the extent that sometimes when we add value, we can’t export the products the way we are supposed to.
We have a unique opportunity at our 14th Ministerial summit in Cameroon next year for Africa to articulate those barriers and for us at the WTO to lower them and make sure Africa gain better percentage of inter and intra-Africa trade.
