Economic Diversification: Border Closure unfriendly to AfCFTA, trade - Toyin Umesiri

First Published in Vanguard Newspapers - Nigeria

Toyin Umesiri is the CEO of Nazaru LLC. and Founder of the Trade with Africa Business Summit. Toyin spent over a decade in corporate America at both Walmart's HQ. in Bentonville, Arkansas and Whirlpool Corporation HQ. in Benton Harbor, Michigan. Her experience spans developing Supply Chain solutions and strategies in the Retail & Manufacturing industries. Toyin is a global influencer and serves as Intra-African Trade Ambassador by appointment of the African Export-Import Bank (Afreximbank) and African Union (AU). She is an inspirational speaker featured as a Leading Woman in Technology on the platform the Spark Women, was published in the book: LEADING WOMEN and recognized as one of Nigeria’s 100 Most Inspiring Women by Leading Ladies Africa

Question: In the face of poor intercontinental and inter-regional relations, how realistic is the accord and how can relations be improved in order to facilitate trade?

As students of history we understand why regional trade in Africa has been low; Colonization across Africa built trade routes that benefited entities outside of Africa to facilitate the movement of raw commodities from Africa to distant shores for processing before being brought back as finished products for consumption. From Oil to Coffee, Cocoa, Rubber, Cashew etc. Africa’s history is rooted in powering the rest of the world with its abundance of natural resources.

With the establishment of the African Continental Free Trade Agreement (AfCFTA), trade is expected to grow exponentially within the continent since both the buyer and the seller will be regionally located. The wealth of Africa will remain in Africa versus profits being repatriated constantly beyond the shores. AfCFTA would grow regional transactions with positive impact to overall GDP. Africa is believed to have been trading in net deficits with the rest of the world; when the world buys our commodities for cheap and sells the finished products back to us - Africans often pay more than anyone else to acquire the final finished product. Maintaining the status quo is simply not acceptable because if nothing changes the trend will continue for years to come especially because those that it favors will never help Africa develop its own value chain.

AfCFTA is a bold move that has launched the continent into a paradigm shift that is forcing everyone to redefine what the future could be for Africa. That is why it is important that we all get behind this Agreement and help make it achievable and successful. We have this shot to lay a solid foundation that the next billion of Africans can build on to create wealth for themselves and prosperity for the continent. AfCFTA is Africa’s agenda for Africa and we must build a coalition of support behind trade and leadership across. Africa must work together to squash things like Xenophobia from occurring and commit to protecting people and properties across the region.

The African Union (AU), under present leadership, would need to consider developing a “One Africa” campaign to mobilize Africa’s youth behind trade since the energy of the youth is what will galvanize farming, construction, manufacturing or any physically intense economic activity. If we do not tap into the energy of our youth others will. Africa has the right population to grow internal trade and everyone needs to get on board to create shared value and prosperity. We can begin to repair the damages of the past by coming together under the African Continental Free Trade Agreement.

In encouraging trade should there be emphasis on any particular segment of society?

Export Development and Promotion serves as anchor element to drive growth of trade. I will therefore encourage governments to assess their Export Promotion Strategies to understand how they can establish Key Performance Indicators (KPIs) to set trade goals and measure progress. I have seen some level of activities across board but what is not clear is the bottom-line impact of the investments made. For example, each States in Nigeria need to have their trade numbers showing volume of exports and what region of the world they export to and their goals to increase the export numbers.

Trade requires all stakeholders to contribute to grow trade. Policy makers would need to rewrite old policies that do not favor trade and eliminate archaic ones that is stifling to trade. Trade Financing institutions would also need to step in to facilitate transactions and help hedge the associated risks. Insurance companies would need to develop new instruments and Transportation and logistics industry must grow to more sophisticated levels and finally the Business Community and Traders must organize themselves and the market. Global Trade opportunities are rarely captured by small firms but by groups of people who have come together to partner and create shared value.

Without the right Export Promotion strategies, AfCFTA would remain on paper. We have seen this happen with other initiatives like the African Growth and Opportunity Act (AGOA) which opened the US market to exports coming out of Africa. AGOA has existed for 20 years but unfortunately the opportunities it provides are yet to be captured fully across Africa. Why? Because we failed to organize, educate, mobilize and fund the business community across Africa behind AGOA. And this is why Nazaru has stepped in by creating an end-to-end training program for Africa’s exporters. Both global and regional trade must be pursued aggressively as they both hold massive export potential for Africa.

AfCFTA opens new regional markets for locally produced items but it is critical that local production capacity be developed. Information and technical know how is important and companies that want to participate in trade should begin to invest and develop foreign partnerships. Banks need to create more funding programs for the manufacturing sector to support long-term investments that would lower the unemployment levels. The cold supply chain across Africa also requires major investment especially since there are 15 landlocked countries whose only viable mode of transportation would be road and rail networks. A sophisticated road and transport network must emerge across Africa to support AfCFTA as well.

As we have seen in the recent oil crisis export development for non-oil export must be fast-tracked. Africa must build an economy that is well diversified to reduces shockwaves and impact. Nigeria cannot afford to continue to have an economy dependent on oil. We have learnt from the past but we often forget or never put those lessons gained into action.

There has been a lot of controversy and conflict around the shutdown of Nigerian land borders. What is your position vis a vis intercontinental trade?

We all know that the currency of trade is trust and investors typically invest in markets that holds higher trust levels. If trust is eroded the market is likely to shrink and the business community would suffer for it. This is why sweeping actions such as the closure of the Nigerian border do not build trust in the market and that single action, even when justified by the government, has negative impact on trust levels whether regionally or globally.

We know there are systemic issues at the borders but closure of the border creates chaos and confusion and offers no permanent solution to the issues. Political will need ro be applied to develop a more lasting solution that would serve the business community long term. Part of the government's role is to remove barriers to trade while not erecting new ones. The border needs to be strengthened but flow of goods must also not be hindered for legitimate businesses. Government is there to serve the business community and not the order way round so any action by the government should not negatively affects businesses.

All stakeholders agree that there is an information gap between the developmental potential for international trade and local resource persons and bodies where they exist. Who, in your view is responsible for bridging this gap and why?

The business community is the central player to trade and everyone else provides supporting structures to facilitate buying and selling at scale. In my opinion the business community engagement around trade in Africa is low and need to increase. For Nazaru we continue to raise awareness, make relevant information available to stakeholders, train and convene those looking to participate in growing African trade.

The business community instead of waiting must take proactive steps to empower themselves with knowledge as well as network to both regionally and globally build trade partnerships. Trade happens at the speed of relationship and that is one of the reasons we created the Trade with Africa Business Summit as a platform to bring all relevant stakeholders together. Through this platform we convene buyers, sellers, investors, trade finance institutions, bankers, policy makers, retailers, manufacturers and distributors of products.

We can take a glimpse at China to see how they grew their economy. They did not sit in China expecting opportunities to come and meet them there but they ventured into uncharted territories to capture trade opportunities. I would like to see the same rigor from Africa’s stakeholders as they pursue to become global citizens. No one is coming to “save” Africa. Africa must save itself!

Your background is in info tech and entrepreneurship. What is your interest in international trade?

I hold a Bachelor’s degree in Mathematical Sciences with a minor in Computer Science and a Master’s degree in Management Information Systems. All through my career the focus has always been to evaluate ways to improve business performance particularly through use of technology. I had the opportunity to serve in leadership roles at the largest companies in the world in retail and manufacturing at both Walmart and Whirlpool Corporation.

When you work for the world’s largest company you see the world through another lens because you can view trade at the highest levels. Working at a company with annual sales volumes reaching $500 billion dollars made me realize what was possible when people came together to achieve a common vision with tenacity and fortitude with the right level of leadership. I consider it an honor and privilege to now be able to apply all that I have learned in support of Africa’s emergence as an economic force.

Your now annual international trade event is now in its third year. What has been its impact on trade relations between Africa and the rest of the world?

Africa has deep reputational issue within the investment community that it must overcome. Over the past 20 to 30 years conversations on Africa has centered on Foreign Aid which has led people to think of the region only within the context of Aid and Charity. We have to reverse Africa being perceived as a region of war, famine and diseases. To capture the right attention in the business and investment community a new narrative has to emerge and our first goal with the Trade with Africa Business Summit was to ignite a fresh dialogue on Africa - one immersed in trade and not aid. It has proven successful as once those mental barriers have been removed people have become more receptive to the idea of increasing trade and investments with Africa.

At our events we have been able to immediately show real investment results by bringing the right knowledge experts together. One thing we also continue to do is to hold our events in business communities and not Washington D.C. When you want to develop Agriculture, Manufacturing, Infrastructure and other sectors we know we must build long term relations with global business leaders

Central to our agenda is to also showcase what Africa has to offer the world in Exports. We believe we are still in the early stages but we continue to drive engagement by helping to build trade partnerships and offer training and support to Africa’s exporters looking to showcase their products, find buyers and distribute their products to global audience.