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Economy

WTO worried over multiple exchange rates policy

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The World Trade Organisation (WTO) is worried about Nigeria’s multiple exchange rate regime and how it will affect its international trade, says the Director-General of of the organization, Dr. Ngozi Okonjo-Iweala.

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A sign of the World Trade Organization (WTO) is seen on their headquarters on September 21, 2018 in Geneva. – A World Trade Organization arbitrator will review on September 21, 2018 a Chinese request to impose more than $7 billion (nearly 6 billion euros) in annual sanctions on the United States over anti-dumping practices, a Geneva trade official said. (Photo by Fabrice COFFRINI / AFP) (Photo credit should read FABRICE COFFRINI/AFP/Getty Images)

Fielding questions after a meeting with President Muhammadu Buhari at the Presidential Villa, Abuja on Monday, Okonjo-Iweala said some member states had equally complained about Nigeria invoking the balance of payment agreements to conserve foreign exchange. Okonjo-Iweala, a former Nigerian Minister of Finance and Coordinating Minister for the Economy, said, “WTO has one of the agreements of balance of payments, and Nigeria certainly invoked this to be able to conserve foreign exchange.

“It’s 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 The World Trade Organisation (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 complained 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 allayed fears that embracing the free trade policy of the world body would harm Nigeria’s economic diversification drive.

Okonjo-Iweala affirmed that special and differential treatment could be applied to prevent vulnerable countries from collapsing under completion.

However, she added that the special treatment would not be forever as such countries would have to eventually open up for competition.

She also said duties could be applied on imports to prevent the country from being a dumping ground.

Okonjo-Iweala admitted that despite lifting millions out of poverty, free trade has not been beneficial to all especially women, saying that in recognition this, the WTO has a deliberate policy to support women.

She said she had discussions in many areas with President Buhari on how the WTO could do not improve the Nigerian economy.

According to her, there is a unique opportunity for the country to improve its standing in trade and add value to its products especially agriculture.

While noting that Nigeria’s shea butter was denied access to the United States and European markets because of poor quality, she said the country could “trade more, export more and add value to its products.”

The D-G noted that Nigeria must out-market other, stressing that there is a high demand for the country’s fashion in other African countries but it has not been able to leverage on it.

On COVID-19, Okonjo-Iweala advised Nigeria to set up local vaccine manufacturing as she noted that coronavirus would not be the last pandemic.

Okonjo-Iweala, has 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 President Buhari.

According to her, 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 equipments, 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.

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