The Nigerian economy may be swimming into troubled waters if urgent steps are not taken to diversify away from crude oil as the country’s main revenue source, the Director-General of the World Trade Organization, Ngozi Okonjo-Iweala has warned.
Okonjo-Iweala gave the warning on Wednesday during her visit to the Executive Director, Nigerian Export Promotion Council (NEPC), Olusegun Awolowo at the end of her three-day official working visit to Nigeria after her assumption of office on March 1.
With the fast-changing dynamics in the global economy amid the growing devastation of coronavirus pandemic, particularly on commodity-dependent economies countries, the former two-time Nigeria’s Finance Minister said Nigeria appears not to be economy in line with the reality.
The current transition from fossil fuels to renewable energy she said, has made diversification of the country’s revenue sources more compelling than ever.
Although she noted that the structures of the Nigerian economy have been diversified, its sources of revenue are yet to be effectively diversified, with more than 60 percent of the country’s revenue earnings still coming from oil.
Citing Norway, one of Nigeria’s contemporaries, as one of the countries that have banned the use of fossil cars ahead of its transition to electric vehicles by 2025, Okonjo-Iweala said the reality is that very soon the market for crude oil would begin to dry up.
“For Nigeria, the transition from crude oil and gas to other sectors is one of the things that is so important not only because of climate change, but also because fossil fuels are wearing out.
“Many countries like Norway and others have said they won’t allow cars with petrol from 2025. This has made us ask the question: What will Nigeria do?
“Although the economy is diversified, our revenue source is not. About 60 percent of our revenue comes from crude oil. If we don’t start now to work on how to diversify our revenue sources, we are going to be in trouble. This is why I have been meeting those that can create jobs,” the WTO DG said.
She said the WTO under her leadership would continue to support Nigeria, particularly women entrepreneurs in the area of boosting exports and capacity building.
“Supporting trade for micro, small and medium enterprises (MSMEs), especially for women entrepreneurs, is meaningful. Trade and globalization have made people very wealthy. But they have left some people behind.
“The income of some people in the Middle East has stagnated. The way that WTO can help is by trying to make rules that would allow fair and equitable exchange of goods and services.
“We will help you (Nigeria) connect to international market, empowering women is good and smart economics. If woman have equal opportunity and access to the global economy as men do, economic growth can increase by $28trillion.
“We will do our best at WTO and ITC to partner with you more, to make sure that the quality of what is being made are up to standards and we are not meeting obstacle.
“We will help you connect better to regional markets. The African Continental Free Trade Agreement (AfCFTA) is a good opportunity that we can really think about. We are not yet there, but we will help you from WTO to penetrate that market and take advantage of it.
In his remarks, Awolowo expressed optimism that with her vast experience and connections, the WTO DG would be better placed to assist Nigeria realize much of its untapped potentials by deepening cooperation with other countries in international trade.
“At NEPC, we have come to a defining moment for international trade. We have developed the zero-oil plan, which is promoting an export-led development agenda for Nigeria.
“We are actively engaged in strategic collaborations and formidable partnerships to achieve our goals,” the NEPC boss said.
Awolowo said a clear area of focus for the Council has been a drive to gain significant participation of women in non-oil export activities, adding that this would help the country achieve the United Nations Sustainable Development Goal No. 5 on gender equality. which cuts across all sectors of the economy.
He underscored the importance of women’s inclusion in trade, saying his management has resolved to ensure that women are not left out in all its programmes.
