From Uche Usim, Abuja
Following the Central Bank of Nigeria’s ban of foreign exchange at official rate for milk imports, the European Union has reported the development to the World Trade Organization (WTO), saying it distorts the balance of payment protocol.
WTO Director General Dr Ngozi Okonjo-Iweala dropped the hint in Abuja at a meeting with the CBN Governor, Mr Godwin Emefiele, on Tuesday.
The CBN last year discontinued the official foreign exchange for milk importation in response to offshore milk production companies, who have been importing their dairy products for about seven decades, not setting up factories in Nigeria to create jobs and reduce the pressure on Nigeria’s foreign reserves.
Emefiele said the bank toed the protectionism path as a way of protecting local industries and strengthening export.
CBN’s move did not go down well with the European Union, who wrote a protest letter to the WTO as a way of making the apex bank rescind its decision.
Commenting on the development, Okonjo-Iweala said that the WTO has remedies which can be explored without banning things whilst protecting local industries against dumping and cheap imports.
‘I understand Nigeria is trying to establish a trade remedies authority and I want to strongly support that so we can use those remedies as a tool to help our industries to grow because some of the issues I raised yesterday. We have complaint against us about the EU about the violation of the balance of payment agreement with respect to trying to protect the diary industry and they feel that this is not the right instrument,’ the WTO DG said.
‘As DG WTO, I have to make this known but this is an issue, which you said, you will like to engage in a little more detail so we can discuss that later about it.
‘I want to say that I think that we have what it takes in this country, particularly in our young people to do the necessary, which is to look forward as to how we are going to create jobs and move this economy in the direction that will support our youth in the future. There are opportunities to improve trade and services so that our economy can climb out of the pandemic and recession that we are in faster than would have been the case.’
In his remarks, Emefiele said Nigeria needs help from WTO, pledging to work closely with the global trade body.
‘People may have criticised how we do our trade but we did it for the protection of our local industry, so they can create jobs and solve the unemployment challenge. We have a young population, a bulk of which are within [the ages of] 18 and 40.
‘We may have faltered but we want to work with you. If there are areas of concern, we are ready to work on them,’ the CBN Governor said.
Emefiele further argued that the COVID-19 pandemic has forced many countries to go back to protectionism as many which hitherto exported food and drugs held back to help themselves first. ‘So, we should shield ourselves so we are not heavily dependent on others.
‘That is why we have provided stimulus, restructured loans and funded a private sector COVID-19 intervention with over N40 billion.
‘We also provided intervention funds through our banks to support the health sector.
‘We’re determined to ensure that inefficiencies are sorted and we can bring back these big names in pharmaceutical companies. We need you to give us a chance. We need your support. Help us carry our story. We really need help. We have naira but not dollars.
‘Nigerian needs to stand up and be counted as the biggest economy in Africa,’ Emefiele stated.