US, EU worried over Nigeria’s policy on access to foreign currency

The United States and the European Union have raised concerns at the World Trade Organization about Nigeria’s central bank curbs on access to foreign currency, a WTO official said on Wednesday.

The bank, seeking to conserve its dollar reserves, said in June that importers could no longer get hard currency from the interbank market to buy 41 items including rice, cement, private jets, steel products, plastics and rubber, soap, cosmetics, furniture and Indian incense.

At least nine WTO members raised concerns about the trade-related impact of the rules at a meeting of the WTO’s Council for Trade in Goods on Tuesday, the WTO official said.

Nigeria’s representative at the meeting said the Nigerian trade ministry was also very concerned and had requested a rollback or standstill of the policy as soon as the bank announced it, the WTO official said.

The U.S. representative at the meeting expressed “strong concern” about the effect on U.S. exports such as agricultural goods, plastics, aircraft and aircraft parts and metal and metal products, adding that the affected exports were worth $500 million in 2013 and 2014, the official said.

The U.S. trade official also said the central bank had justified its action by saying it was “in order to encourage local production of these items”, which revealed its protectionist motivation.

She added that it was damaging the Nigerian economy and would have the opposite of the intended effect, but the Central Bank had tightened the measures in the last few months.

“We are unaware of any effort by Nigeria to justify the measure at the WTO,” the WTO official quoted the U.S. representative as saying to the meeting.

The EU official at the meeting said Nigeria also seemed not to have sought approval from the International Monetary Fund for its foreign exchange curbs, and said they were having a significant impact on trade.

Other countries that had concerns about the curbs were Thailand, which was worried about agricultural shipments, Norway and Chile, which were concerned about fish, and Switzerland, Uruguay, Iceland and Malaysia, which were worried about the “systemic” impact.

The Nigerian official at the meeting said the bank should have had consultations with stakeholders beforehand, including the Nigerian trade ministry, the WTO official said.

He hoped his country’s appointment of a new cabinet, which was taking place on Wednesday, would include assignment of a minister who could talk to the bank about the issue.

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