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.
My introduction to economic reform in my country really began in 2000 when, at the invitation of President Obasanjo, I took a leave of absence from my job at the World Bank to return to Nigeria for six months to serve as his Economic Adviser. My remit was very specific: advise the president on how to manage Nigeria’s debt so that the country could begin the process of seeking and obtaining debt relief from its largely Western group of official creditors, all members of the Paris Club.
I first met President Obasanjo in 1999, shortly after he won the elections but before he was sworn in as president. He had decided to visit important Western capitals to engage in discussions about Nigeria’s problems and to share his vision and his agenda for the country’s economic and social recovery from the “dead” years of General Abacha’s dictatorship.
His public relations adviser, Onyema Ugochukwu, a relative and a close friend of my husband, thought that he needed additional briefing on topical international economic issues of the time, as well as specific advice on how to approach Western leaders on issues of concern to Nigeria, such as lifting the country’s debt burden and improving its image.
Onyema Ugochukwu phoned me one Saturday morning in March 1999 and asked me to put together a brief that would help President Obasanjo prepare for his proposed world tour. The brief I put together focused on Nigeria’s most pressing economic problems, especially its debt, and on how the international community could contribute to solutions.
In particular, I suggested to the president that he might make the case to the international community that their support to solve pressing economic problems in Nigeria would yield the country a much needed “democracy dividend” after decades of military rule. The president liked the brief and the notion of a “democracy dividend.” He used the expression extensively throughout his term in office.
I met President Obasanjo in person when he came to the United States a few weeks later. In January of 2000, he requested that I return to Nigeria as his Economic Adviser for six months. My work in those six months focused on sorting out the extent of the country’s most important financial liabilities (including its US$30 billion in external debt), on getting the seven different offices managing different parts of the debt to cooperate with one another so we could begin to reconcile figures, and ultimately on creating a national Debt Management office (DMO) to bring some clarity and rationality to debt management. This work laid the foundation for my return as Minister of Finance three years later.
Building an Economic Team
In 2003, President Obasanjo won a second term in office and decided to focus much harder on reforming Nigeria’s faltering economy. He needed a modern and technocratic finance minister who was familiar with the fierce politics of the time. My name was suggested to him by Lady Lynda Chalker, a former International Development Secretary of the United Kingdom based on recommendations from two other reformers-Nasir EI Rufai and Oby Ezekwesili-with whom I had struck a friendship during my short stint at home.
Since President Obasanjo was already familiar with my work, I seemed a logical choice, so he rang up my boss-James Wolfensohn, president of the World Bank-to ask him to persuade me to resign my job as vice president and corporate secretary of the World Bank to become Nigeria’s Minister of Finance.
When Jim Wolfensohn approached me, I was torn and conflicted on both a personal and a professional level. On the personal level, my financial situation was different than it had been in 2000 during my advisory stint at home. Then, I had been able to forgo some of my earnings and benefits to serve because we had only one child attending a university.
By 2003, we had two, and a third getting ready to go, and the main question that my husband and I had to confront was how to manage all the financial obligations without going into debt if I went home to serve President Obasanjo. On a professional level, setting up the Debt Management Office had been an eye-opening experience and at the same time a fulfilling one.
I thought this would be an unprecedented opportunity to serve my country again, with a new democracy in place and a president who seemed open to change. But I had also experienced firsthand some of the complicated politics of implementing reform.
Even with an issue as technical as debt management, there were people who were vested in the status quo and did not want change. It seemed to me that reforming the management of the country’s debt would be a picnic in comparison with the challenges I would face as a Minister of Finance.
This time, virtually every aspect of the economy would have to be reformed. A comprehensive strategy would be needed to stabilise Nigeria’s volatile macroeconomic environment, tackle endemic corruption, and redress various structural features of the economy hindering private enterprise. The country’s woeful social indicators and abysmal delivery of basic services such as power, water, and transportation would have to be addressed. The prospects were daunting.
Surely designing and implementing such wide-ranging reforms could not be done by one person alone. Were I to accept, I would need advice on how to approach that enormous task. And accept I did, after two weeks of reflection and consultation with family members and friends, many of whom were opposed to the idea because they felt it was too great a risk to my professional reputation. Many felt that somehow, to quote one of my friends, “my reputation would be rubbished” – either by those who would be against me in government or others outside.
Jim Wolfensohn proffered a great deal of wise advice that tended to confirm my own feelings that this could be a unique opportunity to give back to my country. Because the World Bank had a rule mandating resignation for those accepting policy-making positions, I resigned from my position there once I had decided to accept the offer from Nigeria.
The financial problems were sorted out by President Obasanjo’s approach to the United Nations Development Programme (UNDP) to open a Diaspora Fund similar to the arrangement they had worked out for Afghanistan and other countries.
Returning members of the Nigerian Diaspora would be paid their previous salaries for a year or two until they could make adequate financial arrangements to take care of their existing obligations abroad. Several of us returning to Nigeria benefited from this fund, and it made a clear difference in our ability to return at short notice. The arrangement later became controversial.
Referred to in the news media as the” dollar salary” saga, it was seized on and played up over and over again by anti-reform elements to imply that I was somehow less than committed to Nigeria because I was being paid more than the other ministers, and in foreign currency.
Neither the circumstances in which I took the job, nor the fact that I was not the only official being thus paid, nor even the fact that it was a transitional arrangement and that I gave it up during my last 15 months of work got much play in the media.
As I contemplated the tasks before me, there were no manuals to tell me what to do, so I turned to someone who had just had some success in managing economic reforms. Amaury Bier, Brazil’s former deputy finance minister had just joined the Board of the World Bank as Alternate Executive Director after four years of implementing successful economic reforms under the Cardoso administration. Jim Wolfensohn suggested I talk to him. How did they do it? What practical day to day steps did they take?
The first piece of advice Amaury Bier gave me was critical. “You will need to form an Economic Team of like-minded people who can stick together to fight the tough battles,” he emphasized. In Brazil, he had learned the hard way, a team was essential to bring different perspectives and expertise to the design of the reform program, but, more important, to help push through the cabinet the approval of proposed reforms.
Without team members supporting one another in cabinet, important reforms displacing vested interests could easily be blocked, he emphasized. He also counseled that building team spirit and keeping the team working together would be important as the reforms began to bite, since some people would be interested in dividing the team and fomenting dissension. To avoid this, Bier urged, the team should meet frequently-at least once a week-to discuss progress and problems.
A second piece of advice Bier gave was equally important: there was need for a comprehensive strategy that would set out major challenges and the reforms needed to turn these around. In particular, it would be important to build in the sustainability of such reforms right from the start to avoid later reversals. One good tool was the enactment of legislation to underpin reforms.
Armed with this advice, I flew to Nigeria in May 2003 to discuss the scope of my job and to get President Obasanjo’s agreement on the formation of a Presidential Economic Team. The president readily agreed to the team, noting that I would lead it and he would preside over it as chair.
Working with him, colleagues and I came up with a list of twelve members representing the areas of expertise that various reforms would require. These twelve people – with expertise in macroeconomics, microeconomics, debt management, privatisation, private-sector development, governance, anti-corruption measures, civil-service reform, and budget management – became the core of the team.
One appointment of particular importance (because he or she would have the ear of the president every day) was that of Economic Adviser to the president. We needed a sound macroeconomist-something Nigeria had not had in many years – who would reinforce the importance of the reforms. I nominated Charles Chukwuma Soludo, who later became a Central Bank Governor.
The team faced many challenges and tensions in keeping together, some of these stoked from outside. One early challenge occurred in July 2003 right after cabinet members had been sworn in. The president invited all the new members and other top officials and presidential advisers to a one-day retreat to explain his priorities and objectives for the administration and also to familiarise most of us who had never been in government with the main public service rules and imperatives.
Most of the new members of the Economic Team were there. We sat close to one another in some kind of solidarity. The retreat was well under way when the president announced (completely out of the blue, to me) that he would be moving the Budget Office of the Federation, normally part of the Ministry of Finance, to the Office of the President, along with the new budget director, who was also a member of the Economic Team.
I could hardly believe what I had heard, and turned to a team member to double check if I had heard correctly. It
was already evident that drastic reform of the budget process and of budget priorities would be central to the reforms. It would be important to link such reforms to changes in the financial management system in the finance ministry. Removing the Budget Office was akin to ripping the heart from the chest.
I felt that this would make major changes impossible to achieve and would furthermore deprive the Ministry of Finance of a central economic and political function. I was also in shock because the president had not discussed this with me. I thought, as the Minister of Finance, that he would at least mention such a major change to me, and maybe even ask my opinion of it. The fact that he had not done this was a major eye opener.
I felt two things. First, I could not be Minister of Finance with a major function removed. It would be a hollow job. I would be unable to complete the reforms I had come to Nigeria to complete, and therefore there would be no need for my services. Second, the president evidently did not trust me.
Otherwise, why would he not even have mentioned such a momentous change? I was angry and confused. To shield my feelings from public view, I got up and left the meeting hall. Other members of the Economic Team followed me out of the hall in concern and solidarity. By the time I walked out, I had resolved to leave.
I went ahead and wrote my letter of resignation. I then called the president’s office and asked if I could see him after the retreat. I as granted an evening appointment. I took my resignation letter with me and handed it to the president in an audience filled with tension.
He flung the letter at me and said I was free to resign and leave. I took that at face value, thanked him, and left. I later found out that the flinging of the letter was a sign for me to apologise and withdraw my resignation, but I was as yet untutored in presidential mannerisms and probably still would have resigned had I known what the gesture meant.
That evening, several people came to see me and to put pressure on me to withdraw my resignation. I refused. At the same time, two important members of the president’s inner circle – Principal Secretary Steve Oronsaye and Vice President Alhaji Atiku Abubakar – put pressure on him to reconsider and find a way out.
The president asked me to come back to see him the following morning. I attended the meeting with my father for support. At that meeting, the president told me that he had decided that the Budget Office could stay in the Ministry of Finance but the budget director would be reporting to him.
Mapping out the reform strategy
Even before the reform team had coalesced, some of us who formed the core of the reformers had begun to brainstorm on a strategy that would encapsulate the reforms. Nigeria was really not short on strategies, plans, or visions. We had Vision 2010, which attempted to articulate a way forward for the country’s development.
But this vision was actually not successfully translated into a medium-term program that could be implemented and monitored. We knew that we had to produce a medium-term plan that would pass three tests. It needed a sound diagnosis of the country’s socioeconomic problems; it needed to propose solutions; and it needed to translate the solutions into specific actions that would produce results and could be monitored.
We also knew that, in view of skepticism in the country about reforms and change, we would have to achieve some early victories that would signal change. My training at the World Bank, where I had worked on many reform matrices for a variety of low-income and middle-income countries, would come in handy.
The impetus for quick work on the strategy came from a meeting scheduled for September 2003 between President Obasanjo and British Prime Minister Tony Blair to discuss Obasanjo’s quest for debt relief and for a return of public assets that had been stolen from Nigeria and lodged in the UK.
The president had proposed that the Economic Team accompany him to this meeting to explain Nigeria’s proposed new economic reforms. I solicited written inputs from members of the Economic Team already working on important areas of reform – privatisation, budget monitoring, and price intelligence linked to public procurement reform.
For example, over a weekend, using their inputs, I produced a 17-page paper outlining the major economic and social problems and especially highlighting the problem of Nigeria’s huge external debt overhang, which was a drag on investment and economic growth.
I proposed a set of macroeconomic and structural reforms focusing on budget management and priority setting; fiscal reforms; liberalisation and deregulation of important economic sectors; privatisation of important public enterprises; governance and institutional reforms, including public service reform; and anti-corruption actions, especially concerning public procurement.
After completing the first draft, I invited comments and inputs from team members, then translated the paper into a PowerPoint presentation for the president’s review and comment, including a set of matrices of specific reform actions with a timeline.
I presented the plan first to a joint UK technical team from the Department of International Development and the Treasury, which wanted to make sure we had something serious to share with the prime minister, and then to the prime minister himself.
Prime Minister Blair also invited World Bank president, Jim Wolfensohn to the meeting to get his views on Nigeria’s reforms. With a successful presentation, we knew we had the basis to deepen the analysis into a full-fledged program of change for the economy, incorporating action in essential sectors, including agriculture, education, and health.
During that visit to the UK, the Economic Team stayed late into the night further debating the content and even the name for the strategy. We bandied various names around. It was Nasir EI Rufai who came up with the name that we would eventually use for the strategy: the National Economic Empowerment and Development Strategy (NEEDS).
"A book "Reforming The Unreformable: Lessons From Nigeria", written by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala was launched in Abuja.Various issues, including "Setting the Stage for Reforms", "Advancing Macro-economic Reforms", Promoting Privatisation and Deregulation", among others, are issues incorporated in the 198-page book . The book, which has received accolades from many important personalities, including Nobel Laureate in Economics, Prof. Joseph Stiglitz and Liberian President, Mrs. Ellen Johnson-Sirleaf for its rich insights and prescriptions, is based on her experiences while working with the Economic Team of the Obasanjo administration." - ThisDay
Professor of Economics, Oxford University ,Paul Collier, Minister of Finance South Africa, Pavin Gordhan, Minister of Finance Ngozi Okonjo-Iweala, Former Commonwealth Secretary, Emeka Anyaoku, General and Vice President Namadi Sambo, during the Book presentation. Photo by Gbemiga Olamikan
Former Commonwealth Secretary, Emeka Anyaoku, General and Vice President Namadi Sambo . Photo by Gbemiga Olamikan
President of Stock Exchange Aliko Dangote and Chairman House Committee on Banking and Currency, Rep. Chukwudi Jones Victor Oneyereri Photo by Gbemiga Olamikan
Book Presentation: Chief Sonny Odogwu, Ide-Ahaba of Asaba presenting and Launching Reforming the Ureformable –Lessons from Nigeria to the Public in Abuja. Photo by Gbemiga Olamikan.
Director General of DMO, Dr Abraham Nwanko and Accountant General Jona Otunla Photo by Gbemiga Olamikan.
Book Presentation: From Right, Editor in Chief Vanguard Newspapers Mr Gbenga Adefaye, chatting with Chairman of the event, Chief Emeka Anyaoku Former Commonwealth Secretary-General , Chairman of Vanguard Newspaper, Sam Amuka and Chief Oyema Ugochukwu at book presentation: Reforming the Unreformable Lessons from Nigeria by Ngozi Okonjo-Iweala held in Abuja. Photo by Gbemiga Olamikan.