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Every successful team is built around one great player- a Christiano Ronaldo, a Lionel Messi, a Sunday Mba, etc. Nigeria’s Federal Executive Council no doubt is a team of prodigious talent. President Jonathan has assembled a lot of brain power in his administration.
Yet our Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala simply referred to as CME, stands out as a hyper star; beyond superlatives yet humble and could easily blend into the crowd at Wuse market in Abuja. Some champions are local, throwing their weight around, bullying the weak and vociferously proclaiming pre-eminence. CME does not belong in this category.
She is a genuine world heavy weight champion. Not literally, of course. Her career highlights and trophy cabinet establish her as one of the three accomplished Africans of her generation and a leading citizen of the world. She was Vice President and Corporate Secretary of the World Bank and later Vice President and Managing Director, second in line, of the bank.
The honors she has received now say more about the awarding institutions than her as many are often left unmentioned in what would otherwise be an excessively lengthy citation.
The most recent have come from Forbes, Prospect Magazine and the University of Pennsylvania. Forbes Magazine has listed her, the second year running, among the 100 most powerful women in the world and Prospect Magazine has her in their 100 most important thinkers in the World this year.
University of Pennsylvania has now joined Brown University, Trinity College University of Dublin, Colby College, and Northern Caribbean University among others, in awarding her an Honorary Doctorate. United States of America Vice President Joe Biden delivered the address at what was Penn’s 257th commencement. On Penn’s website Okonjo-Iweala is credited with spearheading initiatives to assist low-income countries during the global food crisis as well as the global financial crisis.
She is also applauded for chairing the raising of $49.3 billion in grants and low interest credit for the world’s poorest nations.
Penn describes her as ‘a renowned development economist and economic reformer’. She is recognized for bringing her talent and character into managing ‘the finances of Africa’s most populous nation and one of the fastest growing economies’.
This definitely is an extraordinary woman whose force of presence forced the World Bank into elections for the first time since it was created in 1944. Though she was unsuccessful mainly as a result of the US Government’s stranglehold on the institution, New York Times, Financial Times, Economist and former World Bank managers, were among the leading lights who endorsed her for the position of World Bank President. There was a global consensus that she was the best candidate in the race.
Nigeria is fortunate to have the best woman for the job of Finance Minister. Yet it has been very challenging. While the economy has continued to grow at consistently over 6% per annum and foreign direct investment has recorded the highest flows in the history of Nigeria the political and security environment has not been the most ideal.
She has had to function within an incredibly bitter political environment where political point scoring trumps national pride and interest. So as we march inexorably towards inclusive development, many have been programmed to live in a different Nigeria where it is believed we are not making economic progress.
According to the recent mid term report of the Goodluck Jonathan administration the Nigerian economy faces several challenges, which the transformation agenda is designed to address.
These are well known and include insufficient jobs and poverty, dependency on oil exports, High food imports/food insecurity, housing deficit, poor state of infrastructure, high inflation, falling reserves, high recurrent expenditure, and rising domestic debts. And of course the elephant in the room is insecurity in the Northeast and the enormous amount of time and resources allocated to addressing this challenge.
A review of President Jonathan’s mid-term report will show that the administration understands where it is coming from and where it is going. Under the leadership of President Goodluck Jonathan and Okonjo-Iweala’s firm and expert steer, our key economic indicators have remained stable or risen.
Our GDP according to the IMF is one of the fastest growing in the world at 7.2%, exchange rate has remained stable at between N155 and N160 to the dollar, inflation has slowed to 9.1% from 12.4% in 2011, and our external reserves have risen to $48.4 billion as of May 2013.
Excess crude account rose to $9 billion at the end of 2012. It now stands at $6 billion as it has helped to meet income shortfall as a result of difference between projected and actual production.
Under Okonjo-Iweala’s steering the Nigeria Sovereign Investment Authority has finally been established at great political cost to President Jonathan who would not be facing some of the political challenges he confronts today if he had simply agreed to carry on sharing excess crude funds and windfalls without a care to the future.
Until recently Nigeria was the only major oil producing country without a Sovereign Wealth Fund. The establishment of the Nigeria Sovereign Investment Authority finally commits Nigeria to responsible management of a portion of our oil funds to investments as has become the global practice.
According to the Sovereign Wealth Fund Institute there are three trillion and one hundred and forty seven billion, nine hundred million US Dollars ($3,147.9t) in oil and gas related funds invested in Sovereign Wealth Funds from over twenty- five countries some of which have more than one fund.
Nigeria, due largely to CME’s efforts and the firm commitment of President Jonathan has now joined this club of responsible countries as investment activities commence this quarter. The responsible and sustainable management of our economy is also reflected in reduction of the cost of governance, an issue that is of tremendous concern to most Nigerians.
Recurrent expenditure has dropped from 74.4% in 2011 to 68.7% in 2013. Government borrowing has also fallen from N862 billion in 2011 to N588 billion in 2013. Our new national debt strategy, which seeks to reduce costly domestic borrowing, will also ensure that banks have no option but to look to extending credit to the real sector as opportunities in government bonds become limited.
This means more jobs and more opportunities in the private sector. Despite concern in some quarters about our national debt, our debt to GDP ratio is actually low at 21%. Compare with South Africa at 42.7%, Sub Saharan Africa at 34.2%, United States at 106% and Japan at 225%.
Our understandable caution may actually cost us an opportunity to develop our infrastructure and economy at a faster rate and bring more people into prosperity. Further signs of prosperity are reflected in reduced imports and increase in our non-oil exports to 31% in 2012 from a mere 9% in 2008. This is nothing but a tectonic shift in our national economy.
We are moving towards a post oil economy. And we don’t seem to even notice it. One area that we all agree Nigeria has to improve on is transparency and the fight against corruption. Much of the focus has been on the anti-corruption agencies such as the Economic and Financial Crimes Commission (EFCC) and the Independent and Corrupt Practices Commission (ICPC), and of course the performance of the judiciary.
Yet a quiet revolution is being led by the Ministry of Finance in limiting the opportunities for corruption by enhancing transparency and making changes in systems and processes.
The key areas corruption has thrived in the past have been in the administration of fuel subsidy, pensions, salaries and general public accounts.
A third area of finance management reform is the recently introduced Treasury Single Window Account, which is a unified structure of government bank accounts that gives a consolidated view of government cash position across MDAs.
With this system in place cash management is more transparent and less open to abuse. According to the Presidential mid term report, as a result of this new practice government overdrawn position dropped from one hundred and two billion in 2011 to nineteen billion in 2012.
Clearly Nigeria is moving in the right economic direction under the leadership of President Jonathan and management of Okonjo-Iweala as Coordinating Minister of the Economy and Minister of Finance. The transformation train is only half way gone on the journey and many more challenges will lie ahead.
One of these challenges will be that of communication. The government cannot continue to claim the ground of the underdog in the battle for this contested space.
Okonjo Iweala will have to lead the charge to show Nigerians what they are seeing. One of the reasons government’s attempt to remove fuel subsidy was unsuccessful was because the charge was not led from the Ministry of Finance.
As Coordinating Minister for the economy she will have to take more responsibility with the inevitable attacks that come with it. Trust is one capital that this minister has and this will need to be spent on getting Nigeria onside the transformation train.12 Dig in, Madam.
•Dimeari Von Kemedi lives Abuja, Nigeria.
There has recently been a lot of misinformation and misconception in our public debate on debt. My goal in this article is to shed some light on the public debt, to clarify the real state of Nigeria’s debt position, and hopefully, provide a knowledge platform for constructive debate.
Let me say at the outset that no one in government is supportive of a Nigeria that returns to a high state of indebtedness. On a personal note, having gone through tremendous stress during the quest for Paris Club debt relief, I am committed to a Nigerian economy that is fiscally prudent, balances its books and remains at a low state of indebtedness.
To begin, Nigeria’s overall debt is comprised of external and domestic debts. The external debt is typically owed to foreign creditors such as multilateral agencies (for example, the Africa Development Bank, the World Bank, or the Islamic Development Bank), to bilateral sources (such as the China Exim Bank, the French Development Bank or the Japanese Aid Agency), or to private creditors such as investors in our Eurobonds. The domestic debt, however, is contracted within Nigerian borders, usually through bond issues which are then purchased by Nigerian banks, local pension funds, and other domestic and foreign investors. The resources raised typically go to help fund the budget or other domestic expenditures, such as infrastructure projects. We also have some contractor arrears, and other local liabilities which are normally handled through the budget.
Both federal and state governments borrow domestically and externally. However, no state government can borrow externally unless guaranteed by the Federal Government. Similarly, state governments’ domestic borrowing is subject to federal government analysis and confirmation – based on clear criteria and guidelines that a state can repay based on their monthly FAAC allocations and internally generated revenues (IGR).
As a nation, we have had a difficult history with debt. As such, no one can forget the challenging times we went through from 2003 to 2005 trying, in the end, successfully to get relief on our large external debt. Neither the government nor any Nigerian wants a repeat of the country’s past history of large debts. That is why the current President Goodluck Jonathan administration, the Legislature, the Ministry of Finance, and the Debt Management Office, are very focused on a conservative and prudent approach to managing the national debt. Our current approach balances Nigeria’s needs for investment in physical and human infrastructure with a strong policy to limit overall indebtedness in relation to our ability to pay. Above all, any debts incurred must go for directly productive purposes which yield results that Nigerians can see.
First the numbers:
a. In 2004, prior to the Paris Club debt relief, Nigeria’s overall debt stock was very high. External debt stood at US$35.9 billion while the stock of the domestic debt amounted to US$10.3 billion resulting in a total of about US$46.2 billion or 64.3% of GDP excluding contractor and pension arrears.
b. After the successful debt relief initiative, Nigeria’s stock of foreign debt declined dramatically. Indeed, in August 2006, when I left office, Nigeria’s foreign and domestic debts amounted to US$3.5 billion and US$13.8 billion respectively – a total of US$17.3 billion or 11.8% of GDP.
c. By August 2011, when I resumed for the second time as Finance Minister, the domestic debt stock had grown substantially to US$42.23 billion, while the external debt was still a modest US$5.67 billion. This implied a total debt stock of US$47.9 billion or 21% of GDP. Note that while the debt stock grew, our national income also grew so that debt to GDP ratio (the parameter used globally to measure a country’s debt sustainability) remains modest and manageable.
d. Thus, the key noticeable change in Nigeria’s indebtedness in recent years has been the growth of domestic debt. There were two main reasons which resulted in this outcome. First, the initial growth of the domestic debt stock was because the federal government wanted to deepen the domestic debt markets and generate a yield curve for Nigeria which ultimately could help our corporate bodies to access the capital markets and borrow funds at more affordable rates. The DMO through its work has been successful in doing this.
Nigerian corporates can now raise money at reasonable rates at home and abroad, helping them secure resources to invest in the economy. Secondly, however, domestic debt was also raised to finance increased budget expenditures including consumption. For example, in 2010, the 53% salary increase for civil servants was financed by raising domestic bonds. Borrowing for recurrent expenditure or consumption, as was the case here is a practice that is less than ideal and one that we should endeavour not to repeat. We must learn that domestic debt should be incurred sparingly at modest and manageable rates so that government is able to service it and pay back domestic creditors. Failure to do so would severely undermine the finances of our private and institutional creditors to the detriment of the economy.
It is with this background in mind that we have put in place several measures to limit and manage the national debt. There are a number of specific policies we have introduced in the current administration to slow down the increase in our overall debt stock.
a. First, we have brought expenditures and revenues much more in line, through a low fiscal deficit of 1.81% GDP, to reduce the need for domestic borrowing. For example, we reduced annual domestic borrowing from N852 billion in 2011, to N744 billion in 2012, and to N577 billion in 2013. Our objective is to reduce government’s domestic borrowing to below N500 billion in the 2014 budget.
b. Second, for the first time, we have paid down part of our domestic debt rather than rolling all of it over. Beginning in February 2013, we successfully retired N75 billion worth of maturing domestic bonds. And we will continue with this practice in the coming years.
c. Third, we have established a sinking fund with an initial capitalisation of N25 billion. This fund will enable the government to retire maturing bond obligations in the future.
d. Fourth, we are working increasingly with states to get a clearer picture of domestic debts acquired by state governments, thanks to the comprehensive review recently completed by the DMO. Our particular concern is that state governments limit borrowings in line with their incomes and put any borrowings made to work on specific projects and programmes that bring direct beneficial results to their citizens.
e. Fifth, instead of the previous practice of contracting foreign loans in an ad hoc manner, we have streamlined the process for federal and state governments and made it transparent through the Medium Term Rolling External Borrowing Plan, which is reviewed and approved by the National Assembly. This plan presents the anticipated loans to be contracted by the government over a three-year time window, so that we can target funds to priority projects, and also make trade-offs where necessary. Notice that this covers planned foreign borrowing by both the federal and state governments for projects that will yield results in infrastructure, education, health, etc. Most loans contracted are on concessional or very favourable terms. For example, many of the multilateral loans are at zero interests, 40-year maturity, and 10 years grace. Others are at less than three per cent rate of interest.
f. And finally, we have put forward a Medium-Term Debt Strategy with a mix of limited external and domestic borrowing that is appropriate for the economy.
But let me repeat that we shall never be complacent about our national debt. We need to be constantly vigilant to limit the amount of debt and create room for the private sector instead to borrow. As such, we need to stay focused on three main priorities.
First, we should continue to monitor our external borrowing and ensure that we do not slip back to our high indebtedness prior to the debt relief programme. As I mentioned earlier, the External Borrowing Plan, helps to address this concern by ensuring that we always have a comprehensive, transparent view of our foreign borrowing. As at now, our external indebtedness is low at $6.67 billion or about three per cent of GDP.
Second, we should closely continue to monitor and limit our domestic debt, and ensure that it stays within a prudent and conservative range. We should pay off debt that is due to the extent of our ability.
And third, we should also continue to closely monitor borrowing by states to ensure that the debt burdens of our state governments remain within manageable levels and that borrowings are applied to specific projects that yield results for citizens of the state. In that regard, we enjoin banks and other lenders to be careful and prudent when lending to ensure that this is done within the existing rules, regulations and guidelines.
Former UN Secretary-General Kofi Annan once said: “Information and knowledge are central to democracy – and they are the conditions for development.” That is precisely why I have gone to some length to throw light on the real facts and the real issues regarding our debt situation and what the federal government is doing to address them. We need to create the basis to have a healthy and constructive public conversation on this issue, not a distorted and partisan battle.
• Dr. Okonjo-Iweala is Nigeria Minister of Finance and Coordinating Minister for the Economy.
Nigeria’s foreign reserve has hit about $50 billion, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala revealed and declared Nigeria as Africa’s current best investment destination
“With a foreign reserve of nearly 50 billion dollars, a stable exchange rate, strong banking sector, massive human and natural resources, Nigeria has indeed become one of the most attractive investment destinations in the world”, a statement from the ministry quoted the minister as telling visiting British investors led by the Lord Mayor of the city of London, Mr. Roger Gifford, in Abuja, yesterday.
The British investors are in Nigeria to explore investment opportunities in the country.
Speaking on Friday on the country’s economy, Okonjo-Iweala told the investors that Nigeria currently was the largest economy in West Africa, second largest in Africa with potential to become the largest African economy in the next five years.
The Coordinating Minister proudly told the investors that Nigeria has managed to bring her inflationary rate to a single digit of 8.6%.
In her explanation, she assured the investors that Nigeria is relatively enjoying a stable exchange rate, clean and strong banking sector.
Notwithstanding, the Minister of Finance told the investors that despite the huge success the country has recorded in the macro-economic sphere, there are other challenges staring at the nation which include unemployment, poor infrastructure, corruption, governance challenge and power. According to her, Nigeria is not relenting in tackling these challenges through several reforms in various sectors in order to rank among the eight strongest economies in the world, in no distant time.
Dr. Okonjo-Iweala, while detailing the steps so far taken in addressing these challenges said that through the Transformation Agenda of the present administration, Nigeria has tried to diversify the economy instead of depending on oil as the only source of income. In her words, Agriculture and Entertainment have been given enough priority owing to their capacity to create jobs for Nigeria teaming unemployed youths.
The Minister said that the government has made frantic efforts to reduce infrastructural problems that were inherited from past administrations in Nigeria. She said that the present government is partnering with China in order to revive the rail sector. Other areas that have received attention are construction and rehabilitation of roads which according to the Minister will boost easy movement of goods and services.
Dr. Ngozi Okonjo-Iweala assured the investors that the power problem would soon be a thing of the past as government has taken a bold step to privatise the power sector. She told the British visitors that the privatization had almost been completed.
On the aviation sector, the Minister informed the investors that there was serious re-modelling of the country’s airports to meet with international standards.
As a follow up, the Mayor of London, Mr. Gifford asked the Minister of the time frame for the completion of the privatization of the power sector, the Minister assured him of a speedy completion as all bottlenecks to the privatization process had been removed.
On the question of Nigeria debt management, the Minister informed the investors that due to past experiences, Nigeria is now allergic to borrowing and has also reduced its domestic debt to 19% and external debt to 2%.
Nigeria’s Minister of Finance Ngozi Okonjo-Iweala Speaks to CNN's Christiane Amanpour, on On Tuesday, 16th April, 2013
“Nigeria Is A Poor Country” – Ngozi Okonjo-Iweala
AMANPOUR – Introducing the interview segment
Welcome back to the program. Africa’s most populous nation, Nigeria, is full of promise. But fulfilling that promise is sometimes a struggle. Plagued by corruption and mismanagement, the resource-rich country has a poverty rate of over 50 percent. Maternal mortality is shockingly high. And more than half of Nigerians don’t have access to electricity.
Nigeria’s president, Goodluck Jonathan, can’t even escape the power problem himself. Here he is on Easter Sunday, delivering a speech to his people only to have it disrupted by a blackout. Ngozi Okonjo-Iweala says that she and her president want more for the country. She’s Nigeria’s finance minister and she’s been lauded as just the kind of reformer that Nigeria needs. She was a runner-up to lead the World Bank and “Forbes” ranked her as one of the world’s most powerful women.
But even she isn’t immune from Nigeria’s problems. Her own mother was kidnapped for a terrifying five days before being released. I spoke to her and I asked her about her country’s uphill struggle to transform Nigeria’s resources into a better life for all the people. We talked when she was here in New York for the Women in the World Summit.
And as you watch, we look forward to your tweets using #amanpour.
AMANPOUR: Dr. Okonjo-Iweala, welcome to the program.
NGOZI OKONJO-IWEALA: Thank you for having me.
AMANPOUR: Great to have you.
OKONJO-IWEALA: Thank you.
AMANPOUR: Nigeria is a huge and important country. We have many, many viewers from Nigeria, always very active and very interested. So it’s great to have you here.
OKONJO-IWEALA: Thank you.
AMANPOUR: You have said and others have said, that 2013 is going to be a real game-changing year, a turning point year for Nigeria, particularly in your area of finance and economics.
OKONJO-IWEALA: Well, it’s going to be a game-changer and a turning point, because this is the year we are going to produce results. And we’re already producing results within the administration.
First, on the economic side, I just want to say that macroeconomic stability has been restored. Now, nobody should minimize that. Remember, there were two lost decades in Africa, in the ’80s and ’90s, where there was so much macro instability that people could not even focus on sectors that could create jobs.
Now things have gone right. We’ve got growth that is at 6.5 percent last year and we’re projecting for 2013, also, around the same number compared to average 5 percent on the African continent.
Now, I just want to say that when you mention GDP growth, people immediately say we can — in my country, they say we can’t eat growth; because we have unemployment challenges, we need to create more jobs. We have a challenge of inclusion. We have problems of inequality.
All those are challenges we face.
AMANPOUR: You are obviously a passionate defender of your country. You are a person who calls for transparency and honesty and best practices. There is a huge problem with corruption in your country. The president promised to address this stuff. And the latest is that an ally of his, a former governor who was convicted of stealing millions of dollars, has been pardoned, embezzling $55 million in public funds. Now, the U.S. calls that a setback for the fight against corruption. I mean how do you answer that?
OKONJO-IWEALA: How do I answer that question? OK, listen to what I have to say on corruption. And I think I have quite a bit to say. I wrote a book recently where I also had a whole chapter on that issue called, “Reforming the Unreformable.”
Nigeria does have a problem with corruption. And so do many other countries, including developed countries. I don’t like the fact that when people mention the name Nigeria, the next thing they say is corruption.
This is a country of 170 million people; 99.9 percent of them are honest, hard-working citizens who just want to get on with their lives and they want a government that delivers for them.
What we’ve said is that in order to help block any leakages and help to, you know, stop any attempts at corruption or taking monies, we must build electronic platforms. We must distance people from the money.
These things were recommended by the World Bank and the IMF. I used to work at the World Bank. We are doing them.
And I strongly believe that we lack institutions. We lack processes.
Now, what President Goodluck Jonathan has done now is to call the judiciary, the legislature and the executive arm for the first time to meet together on this issue and say, this is not just about government, this is about all of us coming together, because even if you catch somebody, they go to the courts and they are let off lightly.
The president can’t do anything about that. The judicial system also has to be strengthened.
Legislators also have to crack down. They themselves have to work at also being transparent and helping the executive.
But for me, also, in addition to doing that, we need to stop talking and identify the specifics, like you mentioned oil leakages. Let me mention two things quickly.
The first one is the oil theft that is 150,000 barrels a day –
AMANPOUR: Which is huge.
OKONJO-IWEALA: — a month — which is huge. Yes. I admit that. And we can’t afford — I’ll tell you; my thesis on corruption is we are still a poor country. We cannot afford any leakage.
We also need the international community to weigh in. We have — Mexico and Nigeria are suffering from this problem, you can check. Mexico has (inaudible) losing 25,000 barrels a day. And they found (inaudible).
In our case, we have international people who also buy that stolen oil. We need them to treat this stolen oil like stolen diamonds, the blood diamonds. Make it blood oil. Help us so that those people don’t have a market to sell this stuff.
That’s one. And we ourselves should commit to fighting — and we are fighting that.
AMANPOUR: Let me ask you about that, because you also have challenges with electricity. You mentioned you’re very rich in oil and people just simply don’t understand why there still seem to be so many problems with electricity.
And it might seem, you know, weird to pick on that one thing, but it is very prevalent. I asked your president about this during an interview I did by satellite when he was at the World Economic Forum in Davos.
Let’s just see what he had to say to me.
GOODLUCK JONATHAN, PREISDENT OF NIGERIA: That is one area that Nigerians are quite pleased with the government, that’s a commitment to improve power. It’s working. So if you are saying something different, I’m really surprised. That is one area, one area that we will — civil society members agree that government has kept faith with its promise.
*end of video clip*
AMANPOUR: Now, that interview caused a bit of a hullabaloo, as I think you know, in Nigeria. And yet, the World Bank has said that half — more than half the Nigerian population doesn’t have any access to the power grid.
OKONJO-IWEALA: As you know, Nigeria became a democracy again when President Obasanjo came into power in 1999. Two decades prior to that, there was hardly any investment in electricity. If you’ve neglected a sector for that long, you’ve not invested, you’ve not even maintained your basic facilities, it’s not going to happen that fast. It takes time. That month, when you interviewed the president, the polls showed, independently, scientifically (inaudible) that they are in technical partnership with dialogue. That 54 percent of Nigerians felt there was some improvement. They do it monthly. Now this month, they’ve surveyed and they’ve showed this going down, because 800 megawatts has been taken off the grid, which is while they are maintaining the grid.
AMANPOUR: Well, let me ask you, because businesses apparently say that this problem with electricity is causing them to, you know, be reluctant to invest.
AMANPOUR: They need this investment…
OKONJO-IWEALA: Nigeria is not the only country. Almost every developing country has a problem with power, as you know. India has it. South Africa has it. South Africa is far better off because they’ve invested much more.
But many developing countries, even China, they are struggling with keeping up with infrastructure.
Now, what we are doing in Nigeria? We have accepted that the government is not the best place to run the power sector, that if we want this country and this economy to do better, we just have to get out. And Nigeria is pursuing one of the most sweeping privatization programs in any country in the world. We are selling off everything. The generation capacity, the distribution capacity in the country, government is only retaining one thing — transmission.
AMANPOUR: Well, on that note, Madam Minister, thank you for joining me.
OKONJO-IWEALA: Thank you, Christiane, for having me.
VIDEO interview here
It was hardly the best of circumstances for an interview when Ngozi Okonjo-Iweala sat down with Foreign Policy in Washington, D.C., recently. In addition to jet lag, the Nigerian finance minister was battling both malaria and the flu. "Anyone else would be lying in bed right now," she said wryly. But toughing through malaria might be easy compared with the Harvard- and MIT-trained economist's day job: attempting to clean up Nigeria's notorious corruption and cutting hugely popular subsidies in a country that has become the textbook example of the resource curse. It's also a brutal place to be in public life: Just two days after this conversation, Okonjo-Iweala's mother was kidnapped and held for ransom. (She was released after five days.) In a wide-ranging conversation, the former World Bank managing director -- favored by many to run the organization, though Barack Obama stuck with tradition and nominated an American, Jim Yong Kim, last year -- touched on the biggest challenges facing Nigeria, why she's bullish about Africa, and why Americans shouldn't be so smug.
There are similarities I've learned living both in the United States and Nigeria. The first is that the U.S. is a big country, and it's very self-absorbed. The average U.S. person doesn't really think about what's happening elsewhere, to be honest. Nigeria is a large country too; we have 167 million people. And people there, too, are not really thinking of what's happening outside. But we're in the Internet age, and so domestic politics is no longer domestic, really. It's international. I don't think that has quite hit our politicians.
The big difference is that the United States, being a developed country, has strong institutions. In Nigeria -- which is a much younger country, only about 50 years since independence -- the lack of these institutions is to be understood. But it does make for a different way of doing business. Some of the things that are looked upon as corruption over there have found legal and professional names over here, in the United States. For instance, at home when people go to lawmakers and induce them with trips and gifts and so on to pass legislation, it's called corruption. But in the U.S. it's actually a profession called lobbying!
Look at what is happening to Africa in the midst of global uncertainty. It's not a fluke. For almost a decade, the continent's economy has been growing at close to 5 percent at a time of real global fragility. African policymakers, finally, are putting in place good economic policies and sound macroeconomic management. And throughout the crisis, they did not roll back these policies. The lessons have been learned.
What we now have to watch for is those countries just discovering big natural resources. In country after country on the continent, the issue is to make sure that the lessons learned from countries like Nigeria and Angola, in terms of how to manage this better, are quickly fed into the newly resource-rich countries, so that they can avoid the mistakes and learn the good lessons of management.
Many oil-dependent countries have populations that think, "Well, we're rich now. Therefore we're entitled to all sorts of subsidies like lower electricity prices and water subsidies, oil profits, and so on." And these become dependencies. So governments need to manage those expectations and let them know that they're not suddenly going to find big lumps of money on their doorsteps, but that the funds are going to be channeled into productive investment.
The first thing is to build strong institutions -- the rule of law, fiscal management, savings. You need to keep your economy diversified. Nigeria went from an economy that was well diversified, with agriculture as the biggest industry, to a monoculture economy of oil. So we must manage the surpluses well. Channel them quickly into sound infrastructure investment -- and into human investments. If you do those things right, then everything else will follow.
Joshua E. Keating is an associate editor at Foreign Policy.
Source: Foreign Policy
I am sceptical about awards in our country. From the national honours given by the federal government, to the honorary doctorates that our universities bestow on individuals, and to the smallest of awards in our clubs and associations, there is too much sycophancy and opportunism in the air. Our most deserving compatriots, who are exemplary in their personal and professional lives, are hardly honoured while crooks, fraudsters and people of questionable characters have ended up being holders of our nation’s highest honours. The situation has become so bad that I have completely lost the appetite for attending award conferment ceremonies.
I am however deeply pleased to learn that the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, who is my sister, friend and confidant has been named the winner of the Silverbird Man of the Year award for 2012 following a public poll of prominent personalities across the country. Later this evening, she will be honoured with the award at the Muson Centre in Lagos. I believe she is the right choice and the decision has boosted my confidence in both the station and its people. Ngo, as some of us like to call her, has done so much for our country, her generation and indeed the world that any honour is well deserved. She is a remarkable woman, a committed wife and mother, a great patriot and a selfless professional.
Time and circumstance decide who we meet in life; our hearts decide who we want to retain in our lives; and people’s behaviour determine whether we want them to remain in our lives or not. Although I had known her from afar, I met Ngozi for the first time in mid-2003 after I was appointed Chairman of the Economic and Financial Crimes Commission (EFCC) by then President Olusegun Obasanjo. Ngozi was Minister of Finance. Sooner than later, I began to interact closely with her after I became a member of the National Economic Team of that administration.
Ngozi’s hardwork, commitment, doggedness, humility, commitment to family value and diplomacy left a lasting impression on me. As I dared and fought the corrupt elements in our country, at great risk to my life and those of my colleagues, Ngozi was one of my greatest supporters. We soon became brother and sister, albeit from different parents, and we have continued to be each other’s keeper even when we find ourselves in different political and ideological camps today.
I am out of the country to honour a long scheduled commitment to a friend. I regret my inability to be present at a sister’s moment of joy and celebration. She deserves my presence and that of my family at the Silverbird award ceremony.
I do not intend to bore you with Ngozi’s accomplishments. A lot has been said and written about that and a lot more would be said at the ceremony. I am writing this aboard my flight just to pass a little message of love and appreciation to a compatriot who has made huge sacrifices in a bid to help remake her badly damaged country. It is just a little note about someone I hold in high esteem.
I respect her even more at this challenging time in our country; a period of huge political, economic and security challenges; a period during which citizens look on to their governments in exasperation and disappointment. In the midst of all these, Ngozi has remained calm, focused and even more determined to help fix her fatherland.
Ngo is an extremely loyal and trusted friend. She stood by me through thick and thin, in spite of high-level pressures to disown some of us. Ngo does not betray her friends. And because of her good nature and kind heart, God has blessed her with a beautiful family, especially her husband who I’m equally close to.
Ngozi is known to always make things happen. She believes that hard work and honesty pay. Ngo is an unrepentant workaholic. She hardly leaves her office before 8 p.m. Even while leaving, she heads home with files to treat. Weekends are never free for this woman. She oscillates between one official engagement and another. It seems that the secret of her many achievements lie in hard work, hard work and more hardwork.
Her brilliant mind is world class, yet she is extremely humble. Her simplicity and humility are remarkable. She has a gift of making people around her comfortable. But what I consider her most outstanding attribute is her leadership quality. During the Obasanjo administration, she led the economic management team with intelligence and maturity. Her leadership qualities combined with hard work and an amiable personality gave her the unique brand she has become in the world today. My observations have convinced me of her genuine and deep love for good leaders and ordinary people all over the world.
The Essential Ngozi Okonjo-Iweala
In her World Bank office, a beautiful portrait of the Sardauna of Sokoto, the late Sir Ahmadu Bello, occupied a central space on the wall. The portrait was there long before she came to Nigeria to serve in government. I once asked her the reason for exhibiting that picture. She said she admires his leadership qualities and achievements, particularly the positive change he brought to the North of Nigeria.
Ngozi treats others as she likes to be treated. She lives a life of constantly improving herself instead of pulling others down. For her, life is about trust, happiness and compassion. It is about standing up for one’s friends. As a true sister, Ngozi stood by me especially at the time I needed support from the people I consider close to me. For that, I will forever be grateful to her.
One other lesson I learnt from this wonderful woman is that life is too short to be spent nursing animosity or registering wrongs. That helped me to understand better what Mark Twain, the famous American writer, meant when he said “keep away from people who try to belittle your ambitions, small people always do that, but the really great ones make you feel that you too can became great.”
Ngo, you are great. The echo of your encouraging voice is still vivid in my memory, always starting with you saying ‘Nuhu the Nuhu’. Thank you so much for everything. Let us all congratulate Ngo and learn a lesson or two from her life of service to her country in particular and mankind in general.
My final words for my sister today is the same apt message of encouragement Mother Theresa left for us in one of her famous quotes. It reads, “Life is an opportunity, benefit from it. Life is beauty, admire it. Life is a dream, realize it. Life is a challenge, meet it. Life is a duty, complete it. Life is a game, play it. Life is a promise, fulfill it. Life is sorrow, overcome it. Life is a song, sing it. Life is a struggle, accept it. Life is a tragedy, confront it. Life is an adventure, dare it. Life is luck, make it. Life is life, fight for it.”
Ribadu was a former Chairman of the Economic and Financial Crimes Commission (EFCC)
Nigeria's finance minister said Monday that the kidnappers who held her mother hostage for five days had demanded her resignation, suggesting the abduction had a political motive.
Ngozi Okonjo-Iweala, one of Nigeria's most prominent figures, has been in a highly publicised battle with fuel importers over subsidy payments that government officials have delayed amid allegations the programme is plagued by mismanagement, overpayment and rule-breaking.
In her first public comments on the kidnapping ordeal, Okonjo-Iweala said in a statement that her 83-year-old mother, Kamene Okonjo, was held "for five days without food," after being taken in the southern, oil-producing Delta state.
Mother and daughter pic :vanguard
Her release was announced on Friday.
"While she was in their custody, the kidnappers spent much of the time harassing her. They told her that I must get on the radio and television and announce my resignation," Okonjo-Iweala said in a statement.
"When she asked why, they told her it was because I did not pay 'Oil subsidy money,'" added Okonjo-Iweala, the former managing director of the World Bank.
She did not take questions after reading her statement and made no comment as to whether a ransom was paid. The circumstances surrounding her mother's release remain unclear.
A parliamentary probe earlier this year found Nigeria, Africa's top oil producer, lost $6.8 billion (5.2 billion euros) through the subsidy programme between 2009 and 2011. The subsidies are designed to hold petrol prices low.
The probe detailed what has long been suspected in Nigeria, describing a lack of accounting, overpayments, wilful disregard for regulations and outright incompetence in managing the programme.
Fuel importers have voiced anger at what they term the government's outstanding payments, while Okonjo-Iweala has been at the forefront of a campaign to ensure that all subsidy claims are legitimate.
The minister, who was also a candidate to head the World Bank earlier this year, said the attack on her family would not lead to a policy change in the government of President Goodluck Jonathan.
"For marketers whose transactions are proven to be fraudulent, the position of the Jonathan government is also clear: we cannot and we will not pay. We will not back down on this," her statement said.
Ransom kidnappings are a lucrative business in southern Nigeria, though such high-profile victims are rare.
Gangs have frequently sought expatriates working in the oil-producing Niger Delta for ransom kidnappings, but Nigerians from wealthy families have increasingly become their targets in recent years.
A 2009 amnesty deal in the Niger Delta led to a sharp drop in unrest in the region, but criminality remains widespread.
In a statement, Special Adviser on Media to the Coordinating Minister, Paul Nwabuikwu, said the wife of the Obi of Ogwashi-Ukwu, Chukuka Okonjo, was released Friday morning.
“I can confirm that Professor Mrs Kamene Okonjo, wife of the Obi of Ogwashi-Uku, Professor Chukuka Okonjo and mother of the Coordinating Minister for the Economy/Minister of Finance, Dr Ngozi Okonjo-Iweala was released this morning, five days after her abduction.
“The Okonjo Family is full of thanks to the Almighty for this happy development. The family is also highly appreciative of the support and encouragement of President Goodluck Jonathan; the Country’s security services for their excellent operations; Governors Emmanuel Uduaghan of Delta, Peter Obi of Anambra, Rotimi Amaechi of Rivers and other Governors as well other friends and well wishers within and outside government for their prayers and encouragement during a very difficult period. May God bless you all.”
Before her released Nigeria army y arrested 63 people in one of their raids in the the search for Prof. Okonjo.
Nigeria's finance minister's mother, Professor Kamene Okonjo, was kidnapped in Ogwashi-Uku, Delta State. She is mother of Ngozi Okonjo-Iweala and wife of the Obi of Ogwashi-Uku Kingdom, Professor Chukwuka Aninshi Okonjo Agbogidi.
The mother of a senior Nigerian minister was today allegedly abducted from her residence by a gang of ten armed men, police said.
According to 2 Zeenews the "82-year-old Kanene Okonjo, mother of Nigeria's Minister of Finance Ngozi Okonjo-Iweala, was kidnapped from the palace of the traditional ruler of the southern Nigerian town of Ogwasi Ukwu in Delta state, they said.
Okonjo is the wife of the traditional ruler of the town. Police spokesman Charles Muka said they arrested a man in connection with the case. "The man was said to have informed the housemaid that he was in the palace to take the queen mother to somewhere in the town." he said.
Abduction of prominent personalities is common in southern parts of Nigeria with the kidnappers demanding for ransom a few hours later. Okonjo-Iweala was previously the managing director of World Bank."
Nigeria’s relative macro-economic stability of the past decade has been aided by the groundwork of reforms embarked upon by two-term finance minister, Ngozi Okonjo – Iweala and Central Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi.
In 1995, Nigeria’s inflation rate was a vertigo inducing 75 percent, while the naira which was at virtual parity with the dollar in the early eighties had tumbled to N21/ $1 by 1999, a more than 400 percent devaluation, according to a BusinessDay analysis of available CBN data.
This was of course in the official market, which met less than a tenth of dollar demand; in the parallel markets where the naira exchanged for N88/$1(in 1999) the rate of naira devaluation was much higher, at over 640 percent, between 1980 and 1999.
“Macro stability in the past decade has resulted fundamentally from the fiscal reforms put in place by Okonjo-Iweala in her first term (in particular, capping the deficit at 3 percent of GDP), and more recently, from the tighter monetary policy regime put in place by the
CBN,” said Razia Khan, regional Head of Research, Africa, at Standard Chartered Bank, in an email response to questions.
In the 20-year period (1980 – 1999) the CPI averaged 25.8 percent. This compares with the 2000 to 2010 period, when inflation averaged 11.9 percent, while the naira has moved from N110/$1 in 2000 – to N157/$1 in 2012, a 42 percent devaluation in ten years, and a testament to the relative macro-economic stability in the latter period.
The reforms have aided the development of the domestic bond market as well.
Moribund until 2003, the domestic bond market today finances much of the FG budget deficit, and some long term infrastructure projects.
This has eliminated the so called ‘ways and means’ (money printing) deficit financing, rampant in the eighties and nineties, and a major source of inflation.
Nigeria’s bond market development has benefited from the lifting of the 1 Year holding period restriction on FGN bonds by Sanusi last year, and a hike in interest rates, leading to attractive yields, and ultimately, the addition of Nigerian Bonds to JPMorgan’s GBI-EM and the Barclays EMLC index.
“It is very unlikely that foreigners would be showing the interest they currently show in Nigeria’s bond market, in the absence of reassurance on these reforms,” said Khan.
The size of the domestic bond market in 2011 was N9.5 trillion ($60 billion), made up of AMCON bonds (57.42 percent), FGN bonds (37.21 percent), Sub nationals (3.58 percent) and Corporate bonds (1.79 percent).
The value of transactions in the domestic fixed income market is up four folds since 2006, reaching a value of N14.7 trillion at the end of 2010, from an almost negligible level in 2000 according to data from investment firm, Vetiva Capital.
“The launch of the Primary Dealers Market Makers platform in 2006 ensured some broadly consistent trading activity in on-the-run bonds, and two-way quotes over-the-counter,” said Samir Gadio, an emerging markets strategist at Standard Bank.
Meanwhile, the nation’s yield curve has extended from 3 months to 20 years, with 3year, 5 year, 10 year and 20 year bonds, routinely issued by the Debt Management Office (DMO).
According to Khan, the important building blocks needed before this could become possible, were put in place by Okonjo-Iweala and Sanusi.
“As a result of the increased flow from offshore investors, the Naira is stable. This has helped too, with macro-economic stability, and acts as a check on policies that should continue to guarantee stability”, he said.
Nigeria last week got an upgrade and new coverage of its sovereign debt, as Standard and Poor’s (S&P) upped it to BB- and Moody’s initiated coverage at the equivalent level, due to progress on reforms.