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Nigeria faces serious economic crisis unless it stops its reliance on fossil fuels, says WTO DG, Okonjo-Iweala

…held closed-door meeting with Pres. Buhari at the start of five-day visit to Nigeria

PRESIDENT BUHARI RECEIVES NEW DG WTO DR OKONJO-IWEALA. 5A&B  President Muhammadu Buhari and The Director General of WTO Dr Ngozi Okonjo-Iweala during a Courtesy Visit at the State House, Abuja. PHOTO; SUNDAY AGHAEZE. MARCH 15TH 2021

 

The Director General of World Trade Organization, Dr Ngozi Okonjo-Iweala, has warned that Nigeria might run into a serious economic crisis in future if it failed to start diversifying from its reliance on fossil fuels.

Okonjo-Iweala said Nigeria’s transition from fossil fuels to renewable energies should start now.

She told State House correspondents after a meeting with President Muhammadu Buhari at the Presidential Villa, Abuja, on Monday that most countries had given timelines for banning use of equipment including cars powered by fossil fuels.

“The need for Nigeria to begin its gradual move away from reliance on oil was one of the issues I discussed with President Buhari.

“The country will be running into an economic crisis in the near future if it does not start diversifying from its reliance on fossil fuels. Nigeria’s transition from fossil fuels to renewable energies should start now.

“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, they are banning cars that use petrol. Diesel is already out,’’ the WTO DG said.

Commenting on the feat achieved by Dangote Group for constructing a petrol refinery, Okonjo-Iweala said it is a commendable achievement, but noted that the days of its relevance would be affected by the fact that the world is moving away from oil and gas.

“Well it is the largest refinery. I wish we had done it years ago. If we had done it earlier and encouraged Alhaji Dangote, who is doing a very good thing, 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 we are where we are and I think he will be able to service other countries on the continent; I mean his cement industry is already in 16 or more countries.

“So he will be able to export. But the one thing about the refinery and so on is that we are using it and exporting.

“So we have to start transiting this Nigerian economy into other areas where we will be able to create jobs and earn foreign exchange and that is why I spoke at length. If we don’t start, we will find ourselves at the end of a couple of decades with no way of being able to make additional foreign exchange for some of the products we need.

“As a country, we really have to go into strong reflection, we have a period of transition. How are we going to use it? That is one of the things we face. So yes, it’s great now and we congratulating him, but we have to start thinking how do we transit from fossil fuels and I’m really worried about that. We need to have a game plan to get there,’’ Nigeria’s former Finance Minister said.

On Nigeria’s foreign exchange, Okonjo-Iweala said the world body was worried about the nation’s multiple exchange rate regime and how it will affect trade.

According to her, some member-states have equally complained about Nigeria’s invoking the balance of payment agreement to make to be able to conserve foreign exchange.

Persecondnews recalls that the Central Bank of Nigeria had in March 2020 said it will migrate to a single exchange rate for the naira by collapsing the multiple exchange rate policy that determined the value for the local currency.

She said: “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 are 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.”

Okonjo-Iweala allayed fears that Nigeria’s embracing the world’s free trade policy would harm its economic diversification, stressing that special and differential treatment could be applied to prevent vulnerable countries from collapsing under competition.

“The special treatment would not be forever as such countries would have to eventually open up for competition. Duties could be applied on imports to prevent the country from being a dumping ground.’’

Okonjo-Iweala said in spite of lifting millions out of poverty, free trade has not been beneficial to all especially women, raising a ray of hope that WTO now has a deliberate policy to support women.

Nigeria, she said, has a unique opportunity to improve its standing in trade and add value to its products especially agriculture.

“Nigeria’s shear butter was denied access to the United States and European markets because of its poor quality. The country could trade more, export more and add value to its products.

“Nigeria must outmarket others as there is a high demand for the country’s fashion in other African countries but it has not been able to leverage on it.’’

 

 

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Written by Per Second News

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