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Now That WTO Has Accepted Ngozi Okonjo-Iweala’s Nomination

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From ADEDAPO DAVID ADAMOLEKUN, Geneva

On June 9, 2020, the WTO communicated on its website that ‘Nigeria, on 9 June 2020, nominated Dr Ngozi Okonjo-Iweala for the post of WTO Director-General to succeed the current Director-General, Mr Roberto Azevêdo, who has announced he will step down on 31 August 2020.’

The WTO’s acceptance and announcement of Nigeria’s Okonjo-Iweala came in the face of days of frenzied media speculations following the initial communication by President Muhammad Buhari on June 4, 2020 of the Government’s choice nominee. Concerns were raised that Nigeria might have lost her slot for nominating a candidate given the closure on 30 November, 2019 of the window set by the African Union.

Before pundits will restart another media spar on the correctness or otherwise of the WTO’s acceptance of Dr Okonjo-Iweala candidacy, let’s see what the WTO Procedures say regarding the nomination process.
WTO Procedures

In a letter by David Walker, Chairman of the WTO General Council, dated 20 May, 2020 and available on the Organisation’s website, on the ‘Appointment of the Next Director-General: Communication from Chairman of the General Council to Members’, he shared some of the milestones for the appointment process as set out in the WTO Procedures.

Furthermore, Mr Walker clarified key administrative details relating to the nominations and provision of supporting information, viz:
“The appointment process will start on Monday 8 June 2020. In line with the Procedures, Members shall have one month after the start of the appointment process to nominate candidates. i.e. from 8 June to 8 July 2020. All nominations and supporting information must be addressed to me, as Chairman of the General Council, and must be received by 8 July 2020 at cob in Geneva. In line with the Procedures, the nominations and supporting information will be distributed to Members as they are received. Nominations and supporting information should be addressed to: Chairman of the General Council World Trade Organization – WTO 154 Rue de Lausanne 1211 Geneva 2 Switzerland.”

It is imperative to understand that nowhere in the Procedures was it required that WTO member countries needed to first go through any regional bloc to submit nominations; or seek the endorsement of individual member countries to put out candidates for the position of the Organisation’s Director-General. It then beggars the question why it became an issue that Nigeria had risked the displeasure of some countries by an ostensible tardy submission of Dr Ngozi Okonjo-Iweala’s nomination on 4 June, or even 9 June 2020 when same was received and accepted by the WTO.
Clearly, President Muhammadu Buhari acted in full compliance of the WTO Procedures in submitting Dr Okonjo-Iweala’s nomination; and well ahead of the schedule too, since the deadline is still four weeks away, 8 July 2020 precisely. But all that speculations are behind us for good now.

What should now be of primary interest to Nigeria and her friends is how to seize the moment and leverage on the golden opportunity to ensure the election of the first African, first woman, the region’s finest, and the globally acclaimed Dr Ngozi Okonjo-Iweala as WTO next Director-General.

Why Ngozi Okonjo-Iweala?

Two developments in the past 12 months will be of seismic importance for the next generations of the African continent: the realisation of the need to proactively manage catastrophes such as the COVID-19 pandemic and natural disasters and the start of the African Continental Free Trade Agreement (ACFTA). In terms of the former, the world has strongly put its weight behind one of Africa’s egalitarian daughters, Dr Ngozi Okonjo-Iweala. Through her leadership of the GAVI, the Vaccine Alliance, world leaders have pledged an additional US$ 8.8 billion far exceeding the target of US$ 7.4 billion. These significant sums will see over 300 million children immunised over the next five years, including the creation and distribution of the COVID vaccine; the largest investment in immunisation ever made by lower-income countries mostly in Africa.

The success at GAVI sets the stage for the next challenge, ACFTA, the most ambitious trade zone project in the world. The brilliance of the African Union Heads of States requires a collective ambition matched with global clout and outstanding diplomatic skills. No other region has tried to weld 54 countries into a single market and eventually a full customs union. It also flies in the face of the waves of nationalism, protectionism and populism surging around the world. The execution of which requires the experience for such negotiations can be gleaned from Dr Okonjo-Iweala’s successful debt cancellation of 60% of Nigeria’s external debt ($18 billion) with the Paris Club. The debt deal also included an innovative buy-back mechanism that wiped out Nigeria’s Paris Club debt and reduced the country’s external indebtedness from $35 billion to $5 billion. More on this below.

At the beginning of the year, while the United Kingdom was finally divorcing itself from the European Union, a group of almost twenty African heads of states were invited to London. The purpose of the visit was to cement the trading relationship between the two continents. Similar advancements have been made by the French, Chinese and Russians to name but a few. The battle for the hearts and minds of the continent is heating up. This highlights the fact that the global trade conversation has moved from the periphery for the continent. In that regard, a steady and recognisable hand is required to steer the global dialogue.

Brains and Mettle

The rationale for her candidacy is transparent. Ngozi Okonjo-Iweala is a global finance expert, an economist and international development professional with over 30 years of experience working in Asia, Africa, Europe, Latin America and North America. She is Chair of the Board of Gavi, the Vaccine Alliance. Since its creation in 2000, Gavi has immunized 760 million children globally and saved thirteen million lives. She sits on the Boards of Standard Chartered PLC and Twitter Inc.

She was recently appointed as African Union (AU) Special Envoy to mobilise International financial support for the fight against COVID-19 and WHO Special Envoy for Access to COVID-19 Tools Accelerator. She is a skilled negotiator and has brokered numerous agreements which have produced win-win outcomes in negotiations. She is regarded as an effective consensus builder and an honest broker enjoying the trust and confidence of governments and other stakeholders.

Previously, Dr. Okonjo-Iweala twice served as Nigeria’s Finance Minister (2003-2006 and 2011-2015) and briefly acted as Foreign Minister in 2006, the first woman to hold both positions. She distinguished herself by carrying out major reforms which improved the effectiveness of these two Ministries and the functioning of the government machinery. She had a 25-year career at the World Bank as a development economist, rising to the No. 2 position of Managing Director, Operations. As a development economist and Finance Minister, Dr Okonjo-Iweala steered her country through various reforms ranging from macroeconomic to trade, financial and real sector issues.

Ngozi Okonjo-Iweala is a firm believer in the power of trade to lift developing countries out of poverty and assist them to achieve robust economic growth and sustainable development. As Finance Minister, she was involved in trade negotiations with other West African countries and contributed to the overhaul of Nigeria’s trade policy enabling it to enhance its competitiveness. She has closely followed developments at the WTO, as she believes that a strengthened multilateral trading system is in the interests of all countries, particularly least developed and African countries.

As Managing Director of the World Bank, she had oversight responsibility for the World Bank’s $81 billion operational portfolio in Africa, South Asia, Europe and Central Asia. Dr Okonjo-Iweala spearheaded several World Bank initiatives to assist low-income countries during the 2008-2009 food crisis and later during the financial crisis. In 2010, she was Chair of the World Bank’s successful drive to raise $49.3 billion in grants and low interest credit for the poorest countries in the world.

As Minister of Finance in Nigeria, she spearheaded negotiations with the Paris Club of Creditors that led to the wiping out of $30 billion of Nigeria’s debt, including the outright cancellation of $18 billion. In her second term as Finance Minister, Dr Okonjo-Iweala was responsible for leading reform that enhanced transparency of government accounts and strengthened institutions against corruption, including the implementation of the GIFMS (Government Integrated Financial Management System), the IPPMS (Integrated Personnel and Payroll Management System), and the TSA (Treasury Single Accounts).

Additionally, Dr Okonjo-Iweala is currently Chair of the Board of the African Union’s African Risk Capacity (ARC), an innovative weather-based insurance mechanism for African countries; and co-Chair of the Global Commission on the Economy and Climate with Lord Nicholas Stern and Mr Paul Polman. She is also Chair of the Board of the Nelson Mandela Institution, an umbrella body for the African Institutes of Science and Technology, and Chair of the Board of the African University of Science and Technology, Abuja. Dr Okonjo-Iweala is a trustee of the Carnegie Endowment for International Peace.

She presently serves on the following advisory boards or groups – the Asian Infrastructure Investment Bank, Harvard University International Advisory Board, the Oxford University Martin School Advisory Council, Mercy Corps International Advisory Board, Women’s World Banking Africa Advisory Board, the International Commission on Financing Global Education (Chaired by Gordon Brown), Japan International Cooperation Agency (JICA) Advisory Board, Tsinghua University Beijing – School of Public Policy and Management Global Advisory Board, the CARICOM (Caribbean) Commission on the Economy, the Bloomberg Task Force on Fiscal Policy for Health, and Tax Inspectors Without Borders of the OECD among others. The list continues.

A Sling Shot Needed

Considering the eminent qualification and robust of mettle of Nigeria’s nominee for the WTO top job, it is evident that the noble objective of the African Union to create a single continental market, through ACFTA, for goods and services, with free movement of business persons and investments will receive a great boost with a purpose-driven leadership at the World Trade Organisation, such as Ngozi Okonj0-Iweala can provide.

Also, there have been calls for the WTO to update its rules and commitment to make them fit with the modern 21st century economy; substantially dependent on services, digitization and cross-border flows that are different from the goods-trade flows that currently define the institution. The argument is that since the Uruguay Round in 1994, which came into effect in 1995 bringing in trade in services and intellectual property for the first time, the WTO hasn’t produced any big achievements and may be progressively losing its attractiveness.

Therefore, as the world aims to ‘build back better’ in the era following COVID-19, the WTO needs a savvy bridge builder, bold reformer and an astute global citizen who will bring much needed acumen for a predictable, transparent, non-discriminatory and open global trading system which is essential for broad-based, sustainable economic recovery. It makes sense that Africa strongly rallies behind Nigeria and join forces with the global community in electing Dr Ngozi Okonjo-Iweala as the next Director Director-General of the World Trade Organisation.

-Adedapo David Adamolekun,
Writes from Geneva, Switzerland

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Aviation

Re: NIGERIA DESIGNATES FIVE AIRPORTS FOR FREE TRADE ZONE

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By Nuhu Adam

The recent announcement of the designation of five international airports – Murtala Muhammed International Airport Lagos, Nnamdi Azikiwe International Airport Abuja, Aminu Kano International Airport Kano, Akanu Ibiam International Airport Enugu and Portharcourt International Airport Omagwa – by the Minister of Aviation, Senator Hadi Sirka to support the implementation of both the African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) agreements is not only a welcome development but a commendable bold move by the government.

Of the five airports, Port – Harcourt airport has the advantage of a complimentary existing Onne Oil and Gas Free Zone. The logistics hub of this zone should take advantage and set the ball rolling immediately to sustain the gains for Oil and Gas cargo, while building capacity at the airport for agro allied export and others using the aviation logistics hub.

Practice in developed and developing countries indicates the existence of numerous and heterogeneous free zones as well as the different role which they have in the economic development of countries that have implemented them. Different industry-specific economic zones can be created to fill certain business needs with the ultimate goal of empowering the economic potentials of the countries in which they are situated. It is along this premise that we make bold to say the free trade zone would offer a huge potential for continental aviation given the potentials of Nigeria dominant market in the West and Central Africa.

The Nigeria aviation logistics hub is about to experience a game changer if the Free Trade zone is well coordinated and implemented and private sector driven.
Aside the increase in the dynamics of economic activities, it will also encourage the advancement of Foreign Direct Investments (FDI) in aviation value chain – OEM supply chain, FBO, capacity building and generation of new entrepreneurial opportunities in e – commerce fulfilment, this is in addition to the likely changes in the real estate market in the airport and its environs among other services.

Benefits accruable by the establishment of a Free Trade Zone
There are loads of advantages available to a company operating within a Free Zone including, but not limited, to the following depending on the model approved for the airport free trade zone:
• No pre-shipment inspection and issuance of Bank Form M required prior to shipment of material from the country of origin. Customers with Bank Bonds executed with the Customs can take their goods into the Nigerian territory after examination and within a very short time.
• While importing cargo the traditional way, you’re subject to clear your material and equipment and pay Customs Duty within 30 days. In the Free zone you are enjoying unlimited time to custom clear your consignment.
• This makes for increased shipments and cargo movements.
• Better cash flow management – Customs Duty Scheduling System. With a Bank Bond/Guarantee in place, you will be able to obtain Customs release of cargo required in the Customs territory. Payment of duty/perfection of Customs entries is then scheduled to be completed within 14 days after delivery – thus deferring Customs Duty payment and obtaining a better cash flow…… Not too sure with AfCTA
• This further translates into increased revenue and earnings in the associated private sector (airlines, clearing/forwarding agencies, banking/finance, services and supplies), increased government revenue and earnings (for Nigerian Customs, Nigerian Civil Aviation Authority, Federal Airports Authority of Nigeria, Cargo Handling Companies, Federal Inland Revenue Service, among others).
• Creation of job opportunities and entrepreneurial development of budding investors.
• Technology transfer and enhancement of local content participation in the nation’s Aviation industry.
• No VAT and withholding tax chargeable on Free Zone storage facilities, services and activities.
• No corporate and personal income tax payable.
• Easy facilitation of expatriate employees working in the Free Zone. No expatriate quota and residence permit are required for the expatriate staff working and domiciled within the area delineated as the Free Zone territory.

Concluding Remarks
Airport Free Zones have proven to be success stories in some countries of the world. The Suvarnabhumi Airport, Bangkok, the Dubai Airport Free Zone, Abu Dhabi Free Zone and Sharjah International Airport Free Zone – all within the United Arab Emirates – are good examples. They have continued to support the economic development of their host nations. All considered, the socio-economic potentials derivable from this development will be felt in a long time to come, especially in Nigeria’s Aviation industry and within the precincts of the neighbouring countries.
More importantly for me, aside the cargo volumes increase is an MRO being championed within a Free Zone to turn Nigeria into the Hub for maintenance, repairs and overhaul of Aircraft in West and Central Africa, while also attracting business from the rest of the aviation and aerospace world will be a catalyst for the new phase of aviation in the region

The MROs in FTZ will result in cost savings to Airlines based in Nigeria and reduce the demand for foreign currency required for Aircraft maintenance.
Labour, which is a major cost item is available locally and at cheaper rates…. More jobs opportunities.
MROs in FTZ would also serve as a platform for capacity building and ensure the development of local labour into highly skilled, certified world-class experts in various aviation related fields.
The aviation logistics value chain will be enhanced in Nigeria and the West and Central Africa Region.

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Economy

FG MAY SLASH CIVIL SERVANTS’ SALARIES, MERGE AGENCIES, OTHERS TO CUT COST- ZAINAB AHMED

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The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said that President Muhammadu Buhari has directed the salaries committee to review payroll and also review the number of agencies.

The government will also remove some redundant items from the budget as a move to cut the cost of governance in the country.

Ahmed disclosed this at the ongoing ‘National Policy Dialogue on Corruption and Cost of Governance in Nigeria’ held in Abuja on Tuesday.

The programme was organised by the Independent Corrupt Practice Commission.

Zainab Ahmed Minister Of Finance Budget And-National-Planning

The government had approved a N13.88trn budget with a deficit of over N5.6trn.

The government projected a revenue of N7.98trn to fund part of the 2021 budget.

“We still see government expenditure increase to a terrain twice higher than our revenue,” Ahmed said.

The Finance boss said all agencies must come together to trim its cost amid the country’s dwindling revenue.

She said, “We need to work together, all agencies of the government to cut down our cost. We need to cut down unnecessary expenditures. Expenditures that we can do without.

“Our budgets are filled year in year out with projects that we see over and over again and also projects that are not necessary.

“Mr President has directed that the salaries committee that I chair, work together with the head of service and other members of the committee to review the government pay rolls in terms of stepping down on cost.”

She revealed that the FG will also review the number of government agencies in terms of their mandates.

Ahmed disclosed that for agencies with the same mandate the government will look at “how to merge the two.”

The Chairman of the ICPC, Bolaji Owasanoye, noted during the stakeholders meeting that the cost of governance is the “driver of corruption in Nigeria.”

He said the government has committed to improving the country’s revenue from new and existing sources.

Owasanoye said the government’s commitment to streamline payroll, removal of subsidies and reduction of the cost of contracts and procurement are all for the benefits of the “poor and vulnerable.”

He said a critical area of concern was “payroll padding” and the “phenomenon of ghost workers.”

He also lamented the duplication of projects such as the constituency projects of lawmakers.

The ICPC boss said funding for such projects are usually released without any mechanism for monitoring and evaluation and reconciliation of the funding.

He cited a project executed by the Redeemed Christian Church of God which was inadvertently diverted as an executive project.

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Economy

Another Increase In Electricity Tariff Imminent, as NERC Considers Appraisals For DisCos

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The stage appears set for an upward review of electricity tariff following the release Monday of indications by the Nigerian Electricity Regulatory Commission (NERC) that it is concluding the Extraordinary Tariff Review process for the 11 Electricity Distribution Companies (DisCos).

With the parameters released by NERC for the review, it is obvious that there will be an upward rather than a downward review.

The reviews, it said, would put into consideration changes in inflation, foreign exchange, gas prices and available generation capacity. Most of these have been on an upward climb, while generation capacity is not known to have improved substantially.

The regulatory body said it would also consider Capital Expenditure (CAPEX) required to evacuate and distribute the said available generation capacity in accordance with EPSRA and other extant industry rules.

In a notice to the general public and industry stakeholders posted on its website, the commission said the review was pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA).

Extraordinary tariff reviews are carried out in instances where industry parameters have changed from those used in the operating tariffs to such an extent that a review is urgently required to maintain the viability of the industry, NERC said.

To worsen matters, the commission has also indicated its plans to commence the processes for the July 2021 Minor Review of the Multi-Year Tariff Order (MYTO-2020), which is done every six months.

“Further to the above, the commission held series of public hearings and stakeholder consultations in the first quarter of 2020 on the Extraordinary Tariff Review Applications of the 11 DisCos to consider their respective five-year Performance Improvement Plans (PIPs).

“However, the evaluation of the DisCos’ requests for review of the CAPEX proposed in their PIPs could not be concluded for the consideration of the commission during the Minor Reviews undertaken in 2020.

“Specifically, Section 21 of the MYTO – 2020 Order provides for consideration of DisCos’ CAPEX application upon further scrutiny and evaluation of the investment proposals,” it said.

NERC said the notice was being issued in compliance with the provisions of EPSRA, the Business Rules of the commission and the Regulations on Procedures for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry.

The commission said it was aimed at soliciting for comments from the general public and stakeholders on the proposed reviews and advised them to send their comments to NERC’s headquarters in Abuja within the next 21 days.

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