By Teddy Nwanunobi
The World Trade Organisation (WTO), on Wednesday, said that the falling oil prices led to a 35 per cent contraction in trade in fuels in 2020 as a result of the outbreak of the Coronavirus (COVID-19) Pandemic.
Africa was the second least affected by the Pandemic, after North America.
In her trade forecast press conference on the WTO’s flagship annual trade statistics and trade forecast, the Director General, Dr. Ngozi Okonjo-Iweala, stated that the volume of world merchandise trade still contracted by 5.3 per cent in 2020.
The forecast noted that the Pandemic had serious implications for the Middle East’s trade figures.
“The impact of the pandemic on merchandise trade volumes differed across regions in 2020, with most regions recording large declines in both exports and imports. Asia was the sole exception, with export volumes up 0.3 per cent and import volumes down a modest 1.3 per cent.
“Regions rich in natural resources saw the largest declines in imports, including Africa (-8.8 per cent), South America (‑9.3 per cent) and the Middle East (-11.3 per cent), probably due to reduced export revenues as oil prices fell around 35 per cent. In comparison to other regions, the decline in North American imports was relatively small (-6.1 per cent),” it said.
Okonjo-Iweala, however, noted that the above contraction was smaller than initially feared.
“Following a sharp decline in the first half of the year, trade recovered more quickly than expected in the second half of 2020. This rebound has continued, and the WTO’s baseline trade forecast foresees an 8 per cent increase in the volume of world merchandise trade for 2021.
“Trade growth is expected to slow to 4 per cent in 2022. It’s important to note that this would still leave trade below its pre-pandemic trend,” she said.
She said that COVID-19 has continued to pose the greatest threat to the outlook for trade.
“New waves of infection could easily further undermine any hoped-for recovery,” she said.
She expressed concern that many countries will be left behind as the world emerges from the crisis.
“Despite the broad-based nature of the global economic recovery to date, there are signs of divergence in trade flows across regions.
“If the current WTO forecast is realised, exports from Asia at the end of 2021 would be 10 per cent higher than they were in 2019, while most other regions would see smaller increases or modest declines.
“For example, exports of Europe and North America’s would be steady, while shipments from Africa and the Middle East would be down 4 per cent and 3 per cent, respectively.The import side would see declines in South America (‑3 per cent), Africa (-2 per cent) and the Middle East (-6 per cent), while Asia (+5 per cent) and North America (+7 per cent) would increase, reflecting the relative strength of their economic recoveries,” she added