WTO Predicts 8.1% Growth in Trade for Nigeria, Others

The World Trade Organisation (WTO) has forecasted that Africa’s share of the volume of the world’s merchandise export and import will increase by 8.1 per cent and 5.5 per cent respectively in 2021. It also projected a 2.6 per cent Gross Domestic Product (GDP) for the continent in 2021 and 3.8 per cent for 2022.

The predictions were made in Zurich, Switzerland, yesterday by the Director-General of the WTO, Dr. Ngozi Okonjo-Iweala, during the virtual “WTO Press Conference on Trade Forecast for 2021 and 2022 and Review for 2020.” Okonjo-Iweala, at another forum yesterday, also called on Nigeria along with other nations to embrace renewable energy sources to curb the threats that products of carbon-emitting origin pose to the world.

The WTO forecasted that global trade would return to its pre-pandemic trend by the fourth quarter of 2021, if vaccines production and distribution are accelerated.

It forecasted that world merchandise trade volume would grow by eight per cent in 2021, after falling by 5.3 per cent in 2020, which it described as a smaller decline than previously estimated.

It, however, projected that trade growth would likely slow to four per cent in 2022.

It also projected that world GDP at market exchange rates should increase by 5.1 per cent in 2021 and 3.8 per cent in 2022, after contracting by 3.8 per cent in 2020.

The WTO said: “Short-term risks to the forecast are firmly on the downside and centred on pandemic-related factors. These include insufficient production and distribution of vaccines, or the emergence of new, vaccine-resistant strains of COVID-19.

“Over the medium-to-long term, public debt and deficits could also weigh on economic growth and trade, particularly in highly indebted developing countries.”

Okonjo-Iweala stated that access to COVID-19 vaccines would be the best stimulus to global economic recovery and vowed that poor countries would never be made to stand in a queue waiting to get vaccines while 70 per cent of available vaccines are administered by only 10 countries as stated by the World Health Organisation.

The WTO’s review of the global merchandise trade in nominal dollar terms showed a decline of seven per cent in 2020 while commercial services exports declined by 20 per cent in the same year.

It attributed 35 per cent contraction in trade in fuels in 2020 to falling oil prices, adding that travel services were down by 63 per cent in 2020 and would not be expected to fully recover until the pandemic waned.

Okonjo-Iweala also said the blocking of the Suez Canal by a container ship, which hundreds of ships stranded or forced to go around the Cape of Good Hope at additional costs to their journey, has been projected to affect global trade by $10 billion per day.

The WTO projected two alternative scenarios for trade 2021.

It stated: “In the upside scenario, vaccine production and dissemination would accelerate, allowing containment measures to be relaxed sooner.

“This would be expected to add about one percentage point to world GDP growth and about 2.5 percentage points to world merchandise trade volume growth in 2021. Trade would return to its pre-pandemic trend by the fourth quarter of 2021. “In the downside scenario, vaccine production does not keep up with demand and/or new variants of the virus emerge against which vaccines are less effective. Such an outcome could shave one percentage point off of global GDP growth in 2021 and lower trade growth by nearly two percentage points.”

Written by: By Emmanuel Addeh in Abuja and Dike Onwuamaeze

This Day Live

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