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January 22, 2019

Will WTO Conference Deliver for Africa ?

Foreign Affairs cabinet secretary Amina Mohamed with WTO Director-General: Roberto Azevêdo at the Word trade ministerial conference in Nairobi on December 15. Photo/Enos Teche.
Foreign Affairs cabinet secretary Amina Mohamed with WTO Director-General: Roberto Azevêdo at the Word trade ministerial conference in Nairobi on December 15. Photo/Enos Teche.

The World Trade Organisation is holding its 10th Ministerial Conference in Nairobi, the first to take place on the continent.  Formed in 1995, the over 160-member organisation deals with global rules of trade between nations. Its noble, yet predictably complex function is to ensure that trade flows as smoothly, predictably and freely as possible.

 This is particularly important for Africa because it is clear today that the future of Africa’s development depends on its ability to move from the sidelines of world trade to its rightful place as the world’s next growth frontier. Economic reforms and regional integration efforts to position itself for growth in both cross border trade and with the rest of the world as equal trade partners mean that Africa’s future is potentially exciting and promising. In place of the past paternalistic relationship where Africa exchanged its vast resources in exchange for aid and freebies, the future is a continent that is ready to take control of its destiny, both politically and economically. The future is in trade not in aid.

Africa’s potential is immense.  Its population of 1.1 billion is 16 per cent of the world population and projected to rise to 40 per cent by the turn of the century.  It has the most youthful population with nearly half its population under 18 years, giving it a massive working class population to drive its future growth.  It is home to 10 of the 16 fastest growing economies in the world and a third of its population is middle-class. 

Far from being the dark continent where only war, disease and famine define its profile, it has its fair share of world achievements.  It has produced 21 Nobel Prize winners, including Kenya's own, the late environmentalist Professor Wangari Maathai.  Rwanda leads the world with the largest number of female parliamentarians at 64 per cent, far above the European average at 25.9 per cent and Americas average at 27.4 per cent.  Africa has produced seven female heads of states in its 50 years of democracy even as the largest world power, the US, continues to grapple with the possibility of a female president in its over 200 years of democracy!    

 Despite the potential, Africa’s share of global income, trade and investment remains a dismal less than five per cent and confines most of its population to generational poverty. 

That said, Africa has the opportunity, and the responsibility to ensure that its voice at the ministerial conference is not only heard loud and clear, but also defended with tact and vigour. This means representatives for African governments embracing fully their right of participation and not bowing to pressure for fake “consensus”.  The representatives must deliver for Africa and resist the enormous pressure to go along with the developed countries’ agenda on their terms, with vague promises to deal with African concerns later, as has often happened in the past.  Besides, where better can Africa’s position be articulated better than in its own home ground? 

As the developing countries seek to have the Doha Convention that addresses their concerns and interests on market access concluded in their favour, agriculture and public health remain key among the critical concerns for Africa.   

One, the liberalisation of agricultural trade has not brought benefits to all as promised under the tenets of WTO. Developed countries continue to subsidise their farmers even as they push for opening up of imports for agricultural produce by African countries who cannot afford to offer subsidies.  The opening of food imports by many African countries means the small scale farmers in Africa cannot sell their produce at competitive and sustainable price even within the domestic market. Perhaps more damaging, through the subsidies and other trade barriers such as tariffs and quotas, developed countries continue to restrict entry of agricultural produce from the developing countries into their markets. 

More significantly and a cause for action for African leaders, unlike three decades ago when Africa had a balanced agricultural trade, today Africa is a net importer of food despite its vast agricultural potential.  Worse still, this is the import of basic food stuffs such as dairy products, edible oils and fats, meats and meat products, sugar and even cereals  This trend is not only an economic barrier to the development of Africa but also threatens food security and livelihoods of the majority that rely on agriculture as the only source of livelihood.  As a matter of fact, according to Food and Agricultural Organisation of the United Nations, by 2007, only one-third (19 out of 53) of African countries had enough agricultural export revenue to pay for food import bill, and the rest had to draw money from other resources or wait for food donations to feed their population.

Secondly, and of equal significance, Trade Related aspects of Intellectual Property Rights relating to drug manufacturing continue to significantly undermine public health in Africa.  The detrimental effects of TRIPS is to keep drug prices high and essential drugs out of reach for many in Africa, where they are needed most. Granted, pharmaceutical companies are primarily driven by commercial interests to maximise shareholder value.  While the ethics of this position may be endlessly argued, it is a concern for Africa when TRIPS works to undermine public health, which is both a moral and basic human right issue.

Besides, while provisions exist to circumvent the rights of patent holders in certain situations, pressure from pharmaceutical lobby groups and their governments has made it impractical for most developing countries to benefit from such provisions.  Compulsory licensing provision, for instance, allows member governments to grant a license to generic drug companies to manufacture patented drugs and sell them at a fraction of the price that the patent holders would.  In addition, parallel importing allows a nation to take advantage of differential pricing of drugs across different countries by allowing importation from the cheapest global price available without authorisation of the patent holder.  For instance if a package of Augmentin, a patented antibiotics, is being sold at Sh1,200 by the patent holder in Kenya, and at Sh800 in South Africa, a non-patent holder can be authorised to import the same product from South Africa and sell it at a lower price without the authorisation of the patent holder.  The recently reported case of the Anglo-Dutch multinational Durex moving to court to stop a Kenyan pharmaceutical firm from importing its condoms appears to be an example of parallel importation provided under WTO. 

Countries such as India, Brazil and South Africa have so far led various efforts to utilise these provisions to bring down the cost of public health, often quoting their constitutional and moral responsibility to provide affordable public health.  However, most African countries, under pressure from pharmaceutical lobby groups and their governments, lack the political will to interpret and implement these provisions in a manner that favours the greatest advancement of public health.  The provisions are essentially good on paper, but of little practical value to most African countries.

In the meantime, despite Africa’s limited resources, it continues to bear the heaviest disease burden, including tuberculosis, malaria, HIV/AIDS, and high maternal and child mortality.  Furthermore Africa is not exempt from the rising global burden of non-communicable diseases, including cardiovascular diseases, diabetes, chronic respiratory conditions, and cancer.

The holding of the ministerial conference in Africa is good for the continent in terms of putting it in the world map, but more importantly, the meeting needs to deliver tangible results for Africa, particularly in agriculture and public health. 

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