*Says globalisation transforming from cooperative to competitive interdependence
WorldStage– The Director-General of World Trade Organisation (WTO), Dr Ngozi Okonjo-Iweala has revealed that in spite of certain policy uncertainties, 72 per cent of world trade still goes on under the Organisation.
Okonjo-Iweala said this in Abuja at the ongoing 7th Africa Emerging Markets Forum.
The forum was jointly organised by the Central Bank of Nigeria (CBN), Emerging Markets Forum (EMF) and the Centre for the Study of Economies of Africa (CSEA).
According to Okonjo-Iweala, in modern terms, world merchandise trade grew by 4.6 per cent as surging demand for AI-related goods offset weaknesses linked to tariff increases trade policy uncertainty.
“Services trade grew by 5.3 per cent again in modern terms, and within that, trading digitally delivered services grew even faster, at almost six per cent.
“Most countries continue to trade on rules-based WTO terms. Around 72 per cent of global goods trade continues to flow on core WTO-most-favoured-nationtariffs,” she said.
“Additional 16 per cent goes on terms within the wider WTO framework, mostly tariff preferences arising from bilateral and regional trade agreements that are built on WTO foundations,” she said.
She said that global goods trade volumes in 2025 were over 12 per cent higher than in 2019, the year before the COVID-19 pandemic, while services trade volumes were 31 per cent higher.
According to her, countries are responding to the Strait of Hormuz crisis with more trade facilitating than trade-restrictive measures.
“They are lifting trade restrictions, facilitating trade in oil and gas products, finding alternative routes to get oil and fertiliser out of the region.
“These measures have not been enough to compensate for the closure of the strait which has hit the world, and especially vulnerable African countries with higher energy, fertiliser and food prices.
“They have not built resilience and prevented a situation that could have been considerably worse for the global economy.
“On the whole, while active strategic competition is affecting some sensitive products and bilateral relationships, the repeal practise of most countries seems to be for continued interdependence, albeit within concentric circles of relatively closer or looser integration.”
She said that the Global South offered a case in point, adding that the share of South-South trade in the global total had increased from under one-tenth in 1995 to about a quarter today.
“They are keeping their trade diplomats busy. Of the 384 existing regional trade agreements that have been formally notified to the WTO, 49 per cent are among developing countries.“Among the eight additional agreements that have not been notified, the South-South share appears to be even higher, and 22 economies still outside the 166 from the WTO are working hard to accede to it,” she said.
COOPERATIVE TO COMPETITIVE INTERDEPENDENCE
Dr Okonjo-Iweala also said that globalisation is gradually transforming from cooperative interdependence to competitive interdependence.
She said the global order created in the aftermath of World War II to foster stability, predictability, peace and prosperity was experiencing the most severe disruptions in its 80-year history.
According to her, much of what has shaped the world is now being called into question.
“States compete vigorously but within a global economic system they cannot afford to abandon.
“They seek to outcompete rivals without sacrificing the benefits of economic integration.
“The hope that global economic integration would produce geopolitical harmony may have failed, at least for now,” she said.
Okonjo-Iweala said the emerging era of competitive interdependence only reinforced the case for rules that make the global system stronger, not weaker.
She said the balance of global economic power had changed dramatically within a generation.
“In 1995, advanced economies accounted for about 60 per cent of global economic output in purchasing power parity terms, while developing countries accounted for only 40 per cent.
“Now, those shares have reversed, thanks to three decades of faster growth in the developing world,” she said.
The WTO boss said economic inequality had widened within many countries, with those at the top of the income ladder receiving an increasing share of national income and wealth.
She quoted a report presented to the G20 by a committee of independent experts on global inequality.
“The report said that more than two-thirds of the global population lived in countries where the top one per cent had increased its share of income since 2000.
“With respect to wealth, the trend is even more pronounced. The top one per cent increased its share in countries that are home to nearly three-quarters of the global population,” she said.
She said a series of technological advances, from computers and the internet to Artificial Intelligence (AI), had transformed how people communicate, produce and trade.
“However, some workers have been displaced and even lost their jobs because of automation, particularly in advanced economies.
“Fears of large-scale AI-induced job losses are intensifying, and history reminds us that waves of new technologies are often accompanied by economic anxiety and social unrest, even though they ultimately deliver significant benefits,” she said.
Okonjo-Iweala said climate change was imposing unequal burdens across and within countries.
She said Europe’s struggles with heatwaves were only part of the story.
“The World Meteorological Organisation estimates that African countries lose between two per cent and five per cent of their GDP annually to climate change.
“Many countries are diverting as much as nine per cent of their budgets to responding to the consequences of extreme weather,” she said.
The CBN Governor, Mr Olayemi Cardoso, expressed delight that the apex bank was co-organising the forum.
According to Cardoso, the collaboration reflects a shared commitment to building a more resilient and prosperous Africa.
“The theme of this year’s forum, ‘Building Africa’s Resilience in a Changing Global Economic Order,’ is timely.
“The global system that has long shaped relations among nations is changing before our eyes.
“Trade is becoming more uneven, capital is becoming more selective and impatient, and the long-standing rules-based international system is being stretched and tested,” Cardoso said.
According to him, for Africa and other emerging markets, the question is no longer whether the global order is changing, but how to turn that change from a source of vulnerability into one of growth and shared prosperity.
He said trade was fragmenting, while geo-economic considerations were causing countries to turn inward and reorganise trade and critical supply chains around trusted partners and labour markets.
“For Africa, this change is both a warning and an opportunity.
“With intra-African trade still accounting for only about 16 per cent of our total trade, we must build stronger regional value chains, produce more of what we consume and trade more with one another.
“The African Continental Free Trade Area provides the platform and opportunity to turn this global shift to Africa’s advantage,” he said.
He, however, said African countries must go beyond agreements and remove practical barriers to trade.
According to him, this can be achieved by improving transport networks, harmonising customs standards and making cross-border payments faster and more affordable.
Cardoso said capital had become increasingly selective and impatient.
“The era of abundant liquidity chasing returns regardless of risk is over. Investors now have more choices and less tolerance for uncertainty.
“Capital increasingly flows to economies that offer credibility, transparency, policy consistency and strong institutions.
“For Africa, this means our development ambitions cannot depend solely on attracting foreign capital.
“We must mobilise more of our own resources, including pension and insurance funds, domestic savings and diaspora capital, and channel them into productive domestic investment,” he said.
He said the apex bank had responded firmly to its core mandates.
“We unified the exchange rate, restored price discovery, ended monetary financing of fiscal deficits, and rebuilt the foreign exchange market around transparency and settlement incentives.
“We tightened monetary policy when necessary and communicated our decisions clearly, including when the message was difficult.
“Today, the results of those sacrifices are evident. Inflation has moderated from high levels despite the energy shock.
“External buffers have strengthened, and the financial system is safer and better capitalised to support the economy,” he said.
