This summer marked the 12th time leaders representing the world’s biggest economies gathered at the G20 Summit. Their mission? “To address major global economic challenges and to contribute to prosperity and well-being.” The wording of each outcome statement in the final G20 communiqué projected unity and purpose, but fireworks and divisions flared up at every stage of the show. Running the show this year, and taking her turn at the rotating G20 presidency, was Germany: a country normally associated with order and efficiency.
German riot police clashed with thousands of protesters—demonstrably frustrated by stimuli ranging from capitalism and Trump to Putin and Erdoğan. We watched the first ever face-to-face encounter between Mr Trump and Putin. We only heard about their alleged second secret meeting when it drew Trump controversy for lacking both an official US translator—and as a result—record. We were told “virtually everyone believes we need free but also fair trade” by Merkel, who struggled to manage an impasse when the United States suggested imposing tariffs on steel imports (including from other G20 members). With one hand dedicated to managing differences on climate change between the USA and the “G19” when they erupted on the final day of talks, and another hand still clenching the gear for a re-election race in September—Merkel’s hands were not empty.
Decisions made at the G20 Summit impact developing countries like Nigeria. Created to confront a series of global financial crisis, culminating in 2008, the G20 answered its critics this year through one of its communiqué declarations about “Sharing the Benefits of Globalization”. The wider communiqué came as a result of a carefully negotiated agreement of all members and reflects the forward intentions of G20 leaders. These are some declarations and decisions that relate to Nigeria:
Trade and Investment
In Nigeria, the average time it takes to export goods is around 20 days, while imports take about 30 days. This is according to Roberto Azevedo, Director-General of the World Trade Organization. “The phrase time is money,” he says, “has never seemed more appropriate. If it takes that long to move your goods then it will drive up your costs and you will simply be priced out of the market.” How can Nigerians afford to do business internationally?
The WTO’s Trade Facilitation Agreement (TFA) aims to help “standardize, streamline and speed-up” customs processes around the world, helping to expedite the movement of goods. In January 2017, Nigeria ratified the TFA and Trade Minister Enelamah handed the acceptance instrument to WTO’s Azevedo at Davos. Having met the quorum of required signatories, the TFA is officially in force and now constitutes binding international trade law.
The G20 welcomed the entry into force of the WTO Trade Facilitation Agreement and called for its full implementation. Implementation is not only about instructions. Implementation includes the provision of technical assistance to developing countries, specifically funds and training to build capacity with local authorities at the border. TFA would reduce members’ trade costs by an average of 14.3 per cent, with developing countries like Nigeria (and her businesses) having the most to gain. Improving trade conditions in Nigeria will also bode well for investors because the terms of “trading across borders” is one metric in the World Bank’s Ease of Doing Business Rankings. On that metric, we rank at 181 out of 190 economies studied – but if we implement the TFA, there is hope.
The Africa Partnership & Infrastructure
The 2017 G20 launched an Africa Partnership to support private investment, sustainable infrastructure, and employment in African countries – among other goals. On the investment front, in particular, the partnership intends to develop country specific measures to improve the macro, business, and financing framework for private investment, including in infrastructure. How will this work? International financial institutions operating in Africa will be asked to provide information on existing investment initiatives in Africa. The purpose is to identify “best-practice instruments and measures that can support private and infrastructure investment, and with that intelligence, create investment compacts.
Some intelligence on Nigerian infrastructure investments is already available on the Global Infrastructure Hub — a G20 initiative with the goal of increasing the flow and quality of private and public infrastructure, globally. By sharing country specific knowledge, their Nigerian outlook projects past 2037 and suggests that a $227billion investment gap exists for our road, water, rail, airport, telecom, and energy needs – so we can strategize accordingly and connect public and private sector finance to meet those needs.
You may argue about the significance of the G20, given it is an informal forum and its decisions are non-binding. You may consider it a strength or weakness that the forum relies on consensus and the commitment of members to follow through. You should know the facts, regardless of the direction you lean: this nimble structure has implemented 70% of its decisions between 2008 and 2014. What could be applied from this model in Nigeria? The G20 governs through a formal multi-stakeholder approach. Business and civil society are not merely subjects for leaders to address at summits but constitute engaged communities who help to shape and implement outcomes. The G20 created formal input channels for strong communities that include all G20 members, and are grouped by stakeholders: business (B20), labour unions (L20), NGOs (C20), science (S20), think tanks (T20), as well as women (W20) and youth associations (Y20). These communities inform G20 decisions with policy recommendations. Could we better organize formal input channels between the top 20 youth associations (for example) and government, at all levels — especially in a scenario where such input into decision making results in a 70 percent yield?
Daniel Akinmade Emejulu
Writes for Venture Africa