Okonjo-Iweala: Nigeria’s multiple exchange rate policies worry her.
The DG of the World Trade Organization, Okonjo-Iweala, has expressed how Nigeria’s multiple exchange rate policies worry her as it will affect trade.
Dr. Ngozi Okonjo-Iweala, the current Director-General of the World Trade Organization (WTO), has said the global body is concerned about Nigeria’s multiple exchange rate regimes and how they will harm trade.
Sending out questions after a meeting with President Muhammadu Buhari held at the presidential villa, in Abuja, on Monday, 15th March, she stated that some member states have also complained about Nigeria’s usage of the balance of payment agreement to preserve foreign exchange.
In March last year, the Central Bank of Nigeria said that it would move to a single exchange rate for the naira by caving in the numerous exchange rate policy that decided the value for the local currency.
In responding to the question as to whether the WTO was concerned about the numerous exchange rate administration in the country, The DG, who also happens to be the former Nigerian Minister of Finance and Coordinating Minister for the Economy, stated, ‘Yes.
The WTO has one of the agreements of the balance of payments, and Nigeria indeed invoked this to conserve foreign exchange. It’s a book list object. But some other members have also filed a complaint against us (Nigeria) that we should have used the article differently. So, yes, the WTO is worried about foreign exchange, how we manage it, how it is used, and how we use it to support production or imports and exports in our economy.
‘And I think that we had that discussion with them, they complaints about the exchange rate regime and we (Nigeria) try to explain. I shouldn’t say we because I’m now DG WTO, it is for Nigeria’s representative to explain to the WTO, to those members complaining why we’re doing this.
But eventually, I think having a strong exchange rate and being able to phase out of this; I think we’ll be heading in that direction. We’re also going to see the governor of the central bank and will undoubtedly discuss some of these issues.’
She also expressed fears that accepting the free trade policy of the world body would cause harm to Nigeria’s economic multiplicity power.
Okonjo-Iweala attested that special and differential treatment could be applied to prevent vulnerable countries from collapsing under completion.
But based on that context, the preferential treatment would not last forever as such countries would eventually have to give way for competition.
She also added that duties could be applied to imports to prevent the country from becoming a dumping ground.
Okonjo-Iweala acknowledged that despite helping millions out of poverty, free trade had not benefitted everyone, especially women, saying that the WTO has a deliberate policy to support women in recognition of this.
She had discussions in different aspects with President Buhari on how the WTO could improve the Nigerian economy.
According to her, there is an unprecedented opportunity for the country to improve its standing in trade and improve the value of its products, especially in the agricultural sector.
She further stated that Nigeria’s shea butter was denied access to the United States and European markets due to poor quality; she said the country could ‘trade more, export more and add value to its products.’
Okonjo Iweala expressed that Nigeria must move others out of the market, stressing a massive demand for the country’s fashion in other African countries. Still, we have not leveraged on it have not.
On COVID-19, Okonjo-Iweala advised Nigeria to create local vaccine manufacturing; she explained that coronavirus would not be the last pandemic.
The DG also warned that Nigeria will be running into economic issues in the nearest future if the country does not begin diversifying from its reliance on fossil fuels now.
According to her, there is a need for Nigeria to begin its step by step moves away from depending on oil was one of the problems she discussed with President Buhari.
She explained that This is the time for Nigeria, the transformation from ancient fuels to renewable energies, noting that most countries are already giving timelines banning the use of equipment, including cars, using fossil fuels.
She expressed concern when reacting to the feat achieved by the Dangote Refinery, which she said is a commendable achievement, noting that the days of its importance would be affected by the fact that the world is gearing away from oil and gas.
‘Well, it’s the biggest refinery; I wish we had done it years ago. Suppose we had done it earlier and encouraged Alhaji Dangote, who is doing a perfect thing. In that case, it could have been better because, at this moment, we would have been able to refine our own oil without importing. Still, we are where we are, and I think he’ll help other countries in the world. I mean, his cement industry is currently in over 16 countries.
‘So, he will be able to export. But the one thing regarding the refinery and so on is even as he’s doing that; we’re using it and shipping, we also have to start looking at the perspective where many countries are now making use of electric cars and numerous developed countries where cars are manufactured or not, have stated that from 2025, I think Norway noted from 2030. On, they are banning any vehicles that use petrol. Diesel is already out.
‘So, we have to begin transforming this Nigerian economy into other aspects, where we will be able to create jobs and have access to foreign exchange, and that’s why I spoke for so long. If we don’t act quickly, we will find ourselves at the end of a couple of decades with no way of making an additional foreign exchange for some of the products we need.
‘So, as a country, we have to reflect solidly, we have a time of transition, how are we going to make use of it. That is one of the things we are faced with. So, yes, it’s great now, and we are congratulating him, but we have to start thinking about how we transition from fossil fuels, and I’m anxious. We need to have a good plan to get there,’ she said.