The disclosure by the Director General of World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, that the organisation is worried about Nigeria’s multiple exchange rate regime and how it will affect trade should serve as a wake-up call on Nigeria’s economic managers, particularly the fiscal and monetary policy makers (the Central Bank of Nigeria).
Okonjo-Iweala, who expressed the concern while fielding questions from State House correspondents after a meeting with President Muhammadu Buhari in Abuja recently, said some WTO member states have complained about Nigeria’s invoking the balance of payment agreement to be able to conserve foreign exchange.
“Yes. WTO has one of the agreements of balance of payments, and Nigeria certainly invoked this to be able to conserve foreign exchange, its book list article. But some other members have brought a complaint against us (Nigeria) that we shouldn’t have used this article in that way.
“So yes, the WTO is concerned about foreign exchange, the way we manage it, the way we use it and how we use it to support manufacturing 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 said.
She said embracing the free trade policy of the WTO would not harm Nigeria’s economic diversification drive as is being speculated in some quarters. She said special and differential treatment could be applied to prevent vulnerable countries from collapsing under competition.
She said the special treatment would not be forever as such countries would have to eventually open up for competition, stressing that duties could be applied on imports to prevent the country from being a dumping ground. She said despite lifting millions out of poverty, free trade has not been beneficial to all, especially women, stressing that in recognition of this, the WTO has a deliberate policy to support women.
Okonjo-Iweala also warned that Nigeria would be running into an economic crisis in the nearest future if the country does not start diversifying from its reliance on fossil fuels now. She said the need for Nigeria to begin its gradual move away from reliance on oil was one of the issues she discussed with the president.
According to the WTO’s director general, now should be Nigeria’s transition period from fossil fuels to renewable energies, noting that most countries of the world are already giving timelines banning use of equipment, including cars, using fossil fuels.
She expressed the concern when reacting to the feat achieved by the Dangote Refinery, which she said is a commendable achievement, noting however that the days of its relevance would be affected by the fact that the world is moving away from oil and gas.
“Well, it’s the largest refinery. I wish we had done it years ago. If we had done it earlier and encouraged Alhaji Dangote, it could have been better because right now we would have been able to have our own oil refined here and not having to import.
“But the one thing about the refinery and so on is even as he’s doing that, we’re using it and exporting, we also have to start looking at the horizon where many countries are now moving to electric cars and many developed countries where cars are manufactured or not, have said that from 2025, I think Norway said from 2030 and on, they are banning any cars that use petrol. Diesel is already out.
She said she also had discussions with the president on what the WTO could do to improve the Nigerian economy. She said there is a unique opportunity for the country to improve its standing in trade and add value to its products, especially agriculture.
Okonjo-Iweala’s panacea for the revamp of Nigeria’s ailing economy should be given all the seriousness it deserves by the Buhari administration for obvious reasons. First, is the fact that she is a Nigerian whose meteoric rise to the helm of affairs of the WTO was influenced by President Buhari. Second, Okonjo-Iweala was not only the engine room of the Jonathan government, Buhari’s predecessor, but also its key economic manager – minister of finance and the coordinating minister of the economy, where she acquitted herself creditably. Third, Okonjo-Iweala has held sway in the Britonwoods institutions for several decades, making her quiet vast in global political economy.
It, therefore, behooves on the Nigerian government and its economic managers to carefully and critically analyse and contextualise the economic blueprint for Nigeria presented by the WTO’s boss with a view to ensuring its holistic and pragmatic implementation. If faithfully implemented the blueprint will, no doubt, go a long way in not just freeing the nation’s economy from being prone to incessant recession but also make the economy virile and competitive globally.