Nigeria's economy needs chance to reset and diversify, says central bank governor

Nigeria's Central Bank Governor Godwin Emefiele briefis the media during the MPC meeting in Abuja, Nigeria January 24, 2020. REUTERS/Afolabi Sotunde

ABUJA (Reuters) - Nigeria needs to be given a chance to reset and diversify its economy, its central bank governor said on Tuesday, addressing concerns raised by the World Trade Organization.

Ngozi Okonjo-Iweala - a former Nigerian finance minister who was appointed director-general of the WTO this month - said on Monday, during a visit to her home country, that some WTO members had expressed concerns about its foreign exchange management.

Africa’s largest economy and top oil exporter, which was grappling with low growth before the pandemic hit demand for crude, exited recession in the fourth quarter of 2020, although the economy shrank overall in 2020.

The central bank, seeking to conserve its dollar reserves, has curbed access to the interbank market for a wide range of importers, hoping to boost local production. Since 2015 it has maintained a multiple currency regime to manage pressure on the naira.

Central bank governor Godwin Emefiele held talks with Okonjo-Iweala on Tuesday, shortly after new data showing that inflation hit a four-year high in January, and a third of workers were unemployed in the last three months of 2020.

“Godwin Emefiele says Nigeria needs to be given a chance to reset and diversify its economy, just as he reiterated the determination of the CBN (Central Bank of Nigeria) to address identified deficiencies in the Nigerian economy,” the bank said in a statement after the meeting.

Nigeria relies on crude oil sales for around 90% of foreign exchange earnings.

“Mr Emefiele said Nigeria’s position on trade was necessitated by the drive to protect local industries to create jobs and employment,” the central bank added.

It said Emefiele had cited stimulus packages and the restructuring of loans as measures used to reduce the impact of the coronavirus pandemic.

Reporting by Camillus Eboh; Writing by Alexis Akwagyiram and Chijioke Ohuocha; Editing by Kevin Liffey