The Information Technology and Innovation Foundation (ITIF) has disclosed that the expansion of trade agreements and elimination of tariffs on IT products could fetch Nigeria $10.3 billion of the $750 billion in a decade.
The second expansion of the Information Technology Agreement (ITA-3) could bring more than 400 unique information technology (ICT) products under the ITA’s tariff-eliminating framework, which would add more than $750 billion to the global economy in 10 years.
But the ITIF noted that while IT is at the core of an ever-expanding range of products, the ITA – the trade agreement that eliminates tariffs on those products—has not been updated since 2015. It stressed that the economic benefits mentioned earlier would further be enhanced if this is updated.
ITIF in a document that studied 22 countries, including Nigeria, explained that expanding the ITA could bring products such as 3D printers, industrial robots, commercial-use drones, patient monitoring systems and other medical devices, lithium-ion batteries, solar cells and high-definition televisions into the agreement.
According to it, if the 82 signatories of the original ITA were to join an expanded ITA-3, the global economy would grow by nearly $766 billion over the ensuing 10 years.
The report disclosed that India, Kenya, Pakistan, and Nigeria would enjoy the largest relative gross domestic product (GDP) growth over 10 years — 2.5 per cent, 2.3 per cent, two per cent, and 1.7 per cent, respectively—though all 22 countries studied would realise larger economies over that period.
ITIF said an ITA-3 expansion could help grow U.S. GDP by $208 billion over a decade, increase U.S. exports of ICT products by $2.8 billion and help create almost 60,000 U.S. jobs.
For most countries, the foundation said expanded economic growth from an ITA-3 would produce more tax revenue over 10 years than would be forgone in tariff revenue.
Expanding the ITA now would come at an important moment, adding that the increased focus on diversification and resiliency of global ICT supply chains provides a major opening for new developing-country suppliers to begin producing and exporting ICT products.
It said countries not participating in the ITA saw their participation in global ICT value chains decline by more than 60 per cent from 1995 to 2009.
ITIF said by eliminating tariffs on trade across hundreds of ICT products, the ITA has played an indispensable role in creating “zero-in/zero-out” tariff environments that have fostered the development and diversification of ICT global value chains (GVCs), helping bring developing economies previously locked out by their prohibitively high tariffs on ICT parts, components, and equipment and undeveloped telecommunications networks into GVCs for ICT goods production and assembly.
According to ITIF, for countries contemplating participation in ITA-1, ITA-2, ITA-3, or all three, the time to move is now, as major economies are looking to diversify their sourcing and supply chains to promote greater supply chain resilience, security and sustainability.
As a result of this, the report said large technology and industrial companies are taking a fresh look at potential suppliers and locations for production and assembly, creating an opportunity for new suppliers and economies to break into technology GVCs.
Conversely, it said countries declining to join ITA-1 and ITA-2, or neglecting to participate in an ITA-3, risk experiencing a technologically deficient economy, reduced productivity, and exclusion from global technology supply chains.
ITIF said nonparticipation in the ITA also limits an economy’s ability to partake in the expanding universe of industrial products that incorporate semiconductors and other advanced technologies and from participating in the development and provision of services-based products that are delivered cross-border using the Internet and which require efficient telecommunications networks.
“Ultimately, refraining from ITA participation reduces countries’ wage growth and opportunity because a technologically deficient workforce cannot be in a position to participate effectively in the advanced global technology supply chains that pay higher wages and demand greater technology training and skills,” ITIF noted.
The report observed that the principal way economies can increase their productivity arises from leveraging the power of ICT. It said ICT involves such powerful tools precisely because it represents a general-purpose technology that enhances the productivity and innovative capacity of every individual, enterprise, and industry it touches throughout an economy —something that holds for both developed and developing countries alike.
“Indeed, ICT represents “super capital” that has a much larger impact on productivity than do other forms of capital. As research performed by Oxford Economics confirms, ICT generates a bigger return to productivity growth than most other forms of capital investment.
“For instance, ICT capital has a three to seven times greater impact on firm productivity than does non-ICT capital. ICT workers also contribute three to five times more productivity than non-ICT workers do,” it stated.