Patricia Scotland QC, Secretary-General of the Commonwealth in this interview with Lehlé Baldé speaks on the Commonwealth’s commitment to foster trade, economic co-operation, investment in human capital amongst African countries of the Commonwealth.
In October of last year, you concluded a successful meeting in Brussels with your counterparts at the African, Caribbean, and Pacific (ACP) Group of States, Patrick Gomes. The leaders agreed to accelerate joint action on matters of mutual interest to boost trade and economic cooperation. Can you talk to some of the ways business owners on the African continent will start to feel the effects of this?
The Commonwealth and the ACP have worked jointly together over more than 10 years to support governments to get the policy environment for trade right. We have worked to ensure African businesses are front and centre of concerns of policymakers as they formulate, negotiation and implement trade policy. We are now at an inflection point in our cooperation, and with all the changes in the Continent we are now working together to see how best we can support private sector development in Africa in the future.
You believe and advocate for free and open trade, as well as the importance of multilateral trading systems. In your view, what are the benefits to the Africa continental free trade agreement?
Africa is continuing to show its openness to trade both at the continental and regional level- initiatives such as the CFTA as well as the fact that the regional communities continue to push for deepening of trade shows that Africa remains open. Integration is a journey and what is heartening is that as challenges arise, the continent is looking for solutions to solve them.The Commonwealth continues to speak up against protectionism – 2018 CHOGM Communique.The Commonwealth is also combating protectionism through practical initiatives, such as the Commonwealth Connectivity Agenda, where provides a platform for members to share experiences and best practices in physical (infrastructure), digital (digital economy), regulatory (ease of doing business), Business to business and supply side (agriculture) connectivity. These look at some of the pressing priorities for Africa- whether it be the need for digital infrastructure to take advantage of digitisation to best lessons on how to create value addition in agriculture.
The CFTA represents a watershed moment because in this time when protectionism is on the rise it signals to the world that Africa is, and continues to be, open. But beyond the symbolic importance it also marks an important landmark on the continent’s development journey as intra-Continental trade is absolutely important to the Continent’s development ambitions. In October, Commonwealth Trade Ministers will meet and they can be expected to continue to push for trade openness.
You have said that a lack of investment in human capital leads to productivity losses in future which constrain the growth and economic transformation of a country. How do we keep governments of developing countries accountable to invest in human capital as the key to unlocking economic potential?
Investment in human capital promotes growth and helps ensure the benefits of economic growth are distributed more equitably. The quality and quantity of education, in particular, has powerful effects on the distribution of income and on economic growth (World Bank, 2007). Each year of schooling boosts long-run growth by 0.58 percentage points. GDP per capita tends to be higher in countries with higher levels of human capital development.
Between 10% and 30% of observed differences in GDP per capita across countries can be attributed to cross-country differences in human capital.
There is a strong correlation between high scores on the World Bank’s human capital index (HCI, 2018) and higher real GDP per capita (see Figure 3.3 in World Bank World Development Report 2019) – the top 3 highest scoring countries on the HCI (Singapore, Korea, Japan) are also among the countries with the highest per capita GDP. In turn, countries with the lowest scores on the HCI also generally have low GDP per capita (e.g. Liberia, Niger, Mali, Mozambique). The positive effects of human capital on growth tend to be strongest in countries where there are better economic opportunities and stronger institutions.
There is evidence of a positive correlation between human capital and the overall level of adoption of advanced technologies (World Bank, 2019). This suggests human capital will continue to be a key factor driving growth in the digital economy. A lack of investment in human capital will lead to productivity losses in the future, constraining growth and economic transformation. The World Bank World Development Report 2019 forecasts that countries with the lowest human capital investments today will have work forces that are only one-third to half as productive as they would be if they received high-quality education and health services.
Your colleagues from the Commonwealth, were on the ground in Nigeria to observe the February presidential election. What are your thoughts on the recently concluded Nigerian 2019 elections?
Across Commonwealth Africa, particularly in Nigeria, we are seeing increased participation in political processes by young people, women, and ordinary citizens. We are also seeing strengthened independent institutions and legal frameworks, including constitutional reforms. One of the conclusions of the 2018 Mo Ibrahim Index on African Governance was that African governance remains on a moderate upward trajectory in spite of variations across countries. Commonwealth countries continue to do well in that index: the top seven, and in fact the top two are from our membership.