OKONJO-IWEALA: IT CANNOT BE BUSINESS AS USUAL AT WTO
The Group Head, W Initiative, Access Bank, Mrs. Ayona Aguele-Trimnell, in this interview speaks about the bank’s commitment towards supporting female-owned businesses by further offering discounted loans at 10 per cent in partnership with the Lagos State
help me with some of the important things at the secretariat. So that would be my first call to action.
You mentioned in your statement and I want you to elaborate on that, when you said the COVID-19 can also be an opportunity for WTO to prove its relevance to the current realities. You were the Chair of GAVI and I wonder if you have any plans on how the WTO would contribute to the fight against the pandemic in a proactive way especially on distribution of vaccines?
I actually think that the COVID-19 is an opportunity for the WTO to have a success and show what we can do both in the short and long-term. And in the short term, I want to look, with staff, at the monitoring functions and see how many countries still have export restrictions and prohibitions that impact on medical commodities and look at those and see how the rules at WTO that apply to opening restrictions and how they have to be transparent and the period you phase them out because it can only be temporary. This would be a top priority to see how we can encourage lifting of those by looking at what the monitoring functions is showing us and then encouraging countries to do that, and that would mean a freer flow of those commodities.
Secondly, with respect to vaccines, I have said that vaccine nationalism does not pay. I have been in politics in my country being a minister, so when this kind of thing happens, it is very natural for leaders and politicians to want to take care of their own population and there is nothing wrong with that. The problem we have is that the pandemic is a global problem; so taking care of your population and being nationalistic with respect to vaccines won’t work this time. Because even if you get all of your population vaccinated and there is a country down the road that hasn’t done that, it would come back in the way of variants. So, one of the things one would like to do is to work very hard to see what the WTO can use all the flexibilities possible to allow countries to manufacture available vaccines so that there can be more for poor countries quickly. And this would be a great support to the COVAX facility which Gavi and the WTO had put together. Actually, the World Health Organisation (WHO), Gavi and Critical Event Preparedness and Response (CEPAR) put together what is called the active accelerator which I mentioned in my speech which is designed to speed up the availability of vaccines to poor countries. So, how can the WTO support that by exercising its flexibilities and we have seen an example. AstraZeneca is already licenced to make its production of vaccines all around the world in many development countries and it has the biggest facility in India. The Serum institute of India can produce a billion cases of vaccines. So, more of these approaches which I call the third wave is what we need to focus on.
Some people think you don’t have experience in international trade, what would you say to them and secondly, many countries are now focusing on regional trade, so what would be the role of WTO?
With regard to the worry and issue of trade experience, I don’t think we should spend a long time on that. 162 countries prior to the blockage from the Trump administration felt I had enough experience to win a consensus and I think that is the key. My background speaks for itself. I have been working in the area of trade as a minister of finance, trade facilitations and customs reported to me. I was coordinating minister of the economy in Nigeria as well as minister of finance and I coordinated all the economic ministries including trade. So, I think somewhere perhaps, someone got the wrong impression and that is not an issue for me. If it is about trade negotiation, I am not a negotiator but I don’t think that is what the WTO needs right now. If it were just skills for trade negotiations only, all our problems would have been solved, because Geneva has no shortage of those skills either within the secretariat or among our ambassadors. They have been there and the problems have not been solved. So, I think those who are saying these need to look at the situation, the problem and what it needs. What it needs is someone who has the capability to drive reforms, who knows trade and does not want to see business
as usual and that is me. On the issue of WTO not working so well and the regional trade agreements, you are right that the rule of the WTO is not keeping up to date, regional trade agreements and bilateral trade agreements have proliferated and actually some of them have more innovations than we have at WTO. But there is one important thing, the WTO is a moving multilateral vehicle where every member can come together and it is far more cost-effective because the economies of scale are there in having multilateral agreement than bilateral and regional agreement. I am not saying those are not important, they are. But I think the WTO and the monitory function is very important so you can monitor not just a group of countries but all countries. Multilateral negotiations are very important just that the WTO has not been able to have any and we are going to have the fishery subsidies as one that would hoping commence. And the WTO is the only place where members can bring their trade disputes.
So, it is the only place in the world and that is a very potent function and that is why we need to reform the dispute settlement mechanism. So, all in all, the WTO has been of upmost benefit to its members including the big and rich countries over time because it has ensured fair and transparent rules of the game and a level playing fields for the multilateral trading system. That is still needed today and that is why the WTO is extremely open to underpin that fair, balanced transparent trading system.
What do you see as the path for the Appellate Body?
The reforms at the appellate body is not going to be an easy one, but there have been specific criticism of the appellate body and it looks to me like the work done by Ambassador Walker shows that the majority of members would like to see the dispute and settlement mechanism and keep the appellate body. But we need to talk to all the members to make sure this is still the case. There were specific criticism of the appellate body overreaching the mandate that was agreed to by members and kind of going to jurisprudence. The entire timeline to reach agreements was supposed to be 90 days and now you have some cases that are ongoing for two years and so all. To be fair, cases today are much more complex than they were in the past so that may account for some of the reason it has been taking so much more time. But we would need to look at that and there is no reason why we cannot come to a situation where the we can go back to the 90-day period and render these cases, solutions and agreements solved faster. Finally, we need to have an appellate body that has the confidence of all.
What will be your priorities for the first 100 days?
The priorities will be one: working on solutions to the COVID-19 pandemic. The WTO has to work extensively about the way it can help solve that, not only on the outside but also the economic side. I mean looking at trade and how to get trade help the world economy to recover.
So it can play a role. I would also like to see a longer term framework set up for response to pandemics; so it is not just solving this immediate problem. If we are going to have more pandemic in the future, I think the WTO should get other international organisations like WHO even the World Bank, IMF and all those multilaterals to try to set the rules so that next time we would not spend time trying to figure out respond, it will just be to trigger a set of actions. So, that is really a top priority, following that I will like us to work on the fisheries subsidies negotiation. I think there is a strong chance to complete them which has been going on for 20 years and this is far too long. We need to be accountable to end these negotiations and end them well because they are very important for the poor and improve sustainability for our fisheries in our oceans, that is very
I think third will then be focusing on the dispute settlement mechanism and trying to set forward a world programme - a set of reforms that can be agreed and push forward. Then, let me add that the digital economy and the e-commerce negotiations are very dear to my heart. I just see the blossoming of SMEs using online platforms to trade and to improve their lives and so I want us to see if we can make progress in that area.
What are the low hanging fruits for
you in the first 100 days?
I think the low hanging fruits are one: To prepare a very successful Ministerial Conference 12, that will come out with outcomes, within that completing the fisheries subsidies. The low hanging fruit I think is for us to agree on that and another low hanging fruit is the dealing with the pandemic. I think we can make some agreement on that and take that off. The third one is agreeing on the world programme for solving the dispute settlement mechanism. I think we need to get back to some of the areas in revamping negotiations and trading of environmental goods and services and trying to work with poor countries.
Then I think the issues of the logistics of trade, I come back to that; how can we encourage low carbon emissions, transportation of goods and services we need to take a look at that but also the issues of high carbon emitting goods themselves and how can we look at the issue of carbon taxes.
For instance, I have argued in the past, that for many countries, this is also a source of revenue.
I think you can make it more attractive to finance ministers by saying this will kill two birds with one stone particularly in developing countries.
It will help you discipline high carbon emissions but also bring in revenues into the purse. So, there are several actions that we need to look at that will be quite beneficial I believe are good. Do not forget fisheries subsidies, is also about sustainability and the environment. So, if we deliver that, that is another thing that adds to the whole environmental area.
But on climate change, am very keen. I just want to state that as we do this we must make sure we do not come up with disciplines that make developing countries feels that barriers are been put against trading of their products and I believe we can handle this in a way that does not do that
Under no circumstances should there be licensing agreements that lead to developing countries paying more than developed countries. The point of having this is to see to the increased volume of manufacturing in order to generate more affordable rates and accessibility. Thus, we need to ensure the manufacturers of those commodities do not allow such to occur. I see how Astrazeneca has been able to do this and it is also talking to many countries across Latin America and Asia about this licensing. Johnson and Johnson is doing some contract manufacturing in South Africa and are interested in this issue of licensing, whilst being aware that the objective is not to penalise developing countries by charging them more. Rather it is to ensure that they have access to them as there is a shortage of vaccines all over the world. There is a huge challenge with the production capacity of the firms to cater for the high demand of the commodities by the world. We feel agreements can be made which are favourable to developing countries.
Agriculture is a sector that is essentially focused on sustainable development of economy. However, the issues facing the sector are not easy, like the issue of access to market and domestic support which we hope the ministerial can look into as well as the export restrictions because this is very important to a lot of countries.
I think the advantage is that there is a fresh pair of hands and ears which seems to be what is needed in order to solve economic problems, rather than repeating the same methods that have been over used over the years. Border adjustment measures is also something that is essential towards the development of global trade and peace. Hence, it is something that we need to reflect upon effectively. Although, it is not easy as it is practical and poses issues as, accurate and justifiable measurements, how they are set, and how they are monitored. These are practical issues that need to be addressed and applied in ways that are not inconvenient to other neighboring countries and continents in respect to their trade.
The problem we have is that the pandemic is a global problem; so taking care of your population and being nationalistic with respect to vaccines won’t work this time. Because even if you get all of your population vaccinated and there is a country down the road that hasn’t done that, it would come back in the way of variants
Can you speak about the Access Bank and LSETF partnership?
I feel very excited about this partnership as it has been ongoing for a few months and it took a little time to put it together so that it would be beneficial, not just to the bank, but to Lagos state as well as our beneficiaries. The W initiative is home to over 10 million female customers in Nigeria and probably the largest portfolio for female customers as well as female entrepreneurs. Since 2016 when we launched the W initiative, it was basically for it to be a non-stop shop for women entrepreneurs and so what we have tried to do over the last six years is to ensure that we actually serve three different categories of women. We have women professionals, women in business and women at home. Specifically, we are talking about women entrepreneurs and so what we have tried to do is not only funding but capacity building over the last 6 years and we have spent billions of naira in doing so. One of the reasons it was attractive and was approached by Lagos state and what is so exciting about this is that as much as they are giving billions out to women, we found a gap and the gap was that start up like one-year old companies find it a little bit difficult to come up with documentation required for getting funding. The second thing we found out was that the very small businesses were not able to access funding and so it was absolutely fantastic when we teamed up with Lagos state to see how we can serve women better. We all know that women businesses in Nigeria are 50 per cent of all the entrepreneurs we have in Nigeria. And this is a huge group but most of them sit slightly lower in micro and small businesses. What this LSETF initiative does is that we are able to provide funding and capacity building to companies run by women and are 1-5 years old and they can take loans as low as N500,000 – N1 million. So it is not only about the people asking for N20 million or N30 million, we are going all the way down. And in some cases, LSETF provides funding for amounts lower than N500,000. With Access Bank, we offer funding from between N500,000 to N5 million.
Can you highlight some of the features that differentiate between the existing W-Power loan and this new partnership with the LSETF. Is there a discount in interest rate?
This product has no collateral as we do not need any house or land to get the money and it is even further discounted. The W loan offers women funding at 15 per cent and with the LSETF, we are going lower to 10 per cent, so that they can grow their businesses. I think it is a fantastic offering and there are obviously some other conditions where the women have to own 50 per cent ownership of their business and they must have been in business from one to five years. And before now, this has never happened in the financial industry in Nigeria and so we are really trying to cater for all aspects of women in every level be it micro, small, medium or large, basically, what Access Bank is doing through its different partners is being able to offer women loans at any point of their business journey.
Can your existing customers in W-Power loan switch from refinancing their existing loans at 15 percent to 10 percent or this for new customer?
We have over 250,000 women businesses with the W power loan and a lot of them have been with the bank for years. And a lot of the capacity training that is being offered both to them and the LSETF loan is basically the same and is top class quality. You probably cannot cancel your W power loan and run off to get a LSEFT initiative. There are criteria, but again I cannot say if you have W power loan you cannot apply for LSETF. Obviously, it would depend on the capacity of your business or the capacity to pay back because it is not at the end of the day, free money.