Africa, Business, Politics

Africa’s most powerful woman’s back, with a promise of even more fireworks

By Simon Allison 19 July 2011

In her first stint in charge of the Nigerian economy, Ngozi Okonjo-Iweala wiped out $30 billion dollars of debt, doubled the country’s growth rate and became so popular that then-president Obasanjo quickly shifted her out of the limelight. Now she’s back in charge of the purse strings of Africa’s most populous country, and is already rocking the boat. By SIMON ALLISON.

Goodluck Jonathan is enjoying a year of firsts. Although technically the incumbent, due to the unexpected death of Umaru Yar Adua in the middle of his term, Jonathan’s victory in Nigeria’s presidential elections was his first ever electoral success; indeed, the first time his name had ever appeared at the top of any kind of electoral ticket. This has given him the chance to form his first cabinet; traditionally, the time in Nigerian politics where newly-minted leaders get to reward loyalty and consolidate their own power.

Jonathan is no exception. His cabinet is filled largely with party stalwarts and contains very few northerners, a fact that is unlikely to calm the rising tensions in Nigeria’s northern provinces. But there are a couple of surprises. Thirteen out of the 40 ministers are female, as compared to nine in the previous administration; this is been ascribed to the influence of feisty first lady Dame Patience Jonathan. But most surprising is the return as finance minister of Ngozi Okonjo-Iweala, one of the most successful, if atypical, Nigerian politicians of the last decade.

Okonjo-Iweala might object to the label of politician. A World Bank veteran, currently in the process of disengaging from her post as one of the institution’s managing directors, she has a degree from Harvard and a doctorate from MIT as well as a wealth of experience in development economics. In 2003, she was brought in by Obasanjo as his finance minister, with a mandate to clean up Nigeria’s massive debt problem and bring some accountability into government and, perhaps most importantly, to give his controversial administration a little credibility in the international financial community in which Okonjo-Iweala is so highly respected.

By most accounts, Okonjo-Iweala delivered. In tough negotiations with the Paris Club of creditor nations, she had $18 billion of debt cancelled outright, and paid the remaining $12 billion a year later. She initiated full monthly reporting on how much money states received from the federal government, published in national newspapers and signed Nigeria up to the voluntary Extractive Industries Transparency Initiative, which has helped reduce corruption in the oil sector. Under her watch, Nigeria’s GDP growth rate more than doubled, and Nigeria secured its first sovereign credit ratings from Fitch Ratings and Standard & Poor’s – not very good ratings, it must be said, but just getting rated is an achievement in itself.

This success was accompanied by a corresponding growth in her own popularity. From being a relative unknown within Nigeria, she was suddenly a household name, with a reputation for competence and incorruptibility that few in government could match. Wary of this, Obasanjo shifted her sideways into the still important but less immediately influential role of foreign minister. With no expertise in foreign relations, Okonjo-Iweala resigned shortly after, and rejoined the World Bank in 2007.

But now she’s back. Her appointment is a sign that Jonathan is taking economic reform seriously, and has been well received by the international financial community. She’ll be looking after Africa’s third biggest economy, with a view to improving that ranking, and it won’t be an easy task. As well as tackling the institutional corruption which is so prevalent in Nigeria, she has to find ways to diversify the economy away from its near complete reliance on oil, bring in significant foreign investment, and begin the process of hauling out of poverty the 70% of Nigerians who live below the poverty line.

Her position makes her, once again, the most powerful woman in Africa. Ellen Johnson-Sirleaf might disagree, but Liberia is no African superpower; given the right backing, Okonjo-Iweala will be determining the economic future of more than 150 million Africans.

She’s already begun to make waves. Speaking at her clearance hearing in the Nigerian Senate, she told the senators the budget was skewed too far in favour of recurrent expenditure such as government salaries and promised a budget overhaul. “Can we run a budget that is not negative? Absolutely. We can do it, we have done it. We have been able in the past,” she said.

Of course, she can only do it with support from the top. Goodluck Jonathan has demonstrated that she is his most important minister, and promised to see her at least three times a week (as compared to other ministers who are grateful for any face-time with the president). This works for him too; as long as they’re seen to be working together, any success she achieves is to his credit.

But her appointment is not without its critics and its success not a foregone conclusion. She told the Financial Times that she’d already received threatening calls from corrupt politicians and businessmen within Nigeria, warning her not take up the ministerial position. “But I cannot give up on Nigeria,” she said. She’s no stranger to threats, having received a fair few during her first stint as finance minister.

Her long association with the World Bank also leaves her inextricably connected with that institution’s liberal economic development policies; failed policies in many people’s eyes. “Nigeria actually lost a decade of development, no thanks to [Okonjo-Iweala’s] uncritical neo-liberal policy instruments of liberalisation, privatisation, right-sizing the public sector,” wrote columnist Issa Aremu in the Lagos Daily Trust. He added that during Okonjo-Iweala’s first tenure as finance minister “the rich got richer without value addition whatsoever while the poor got enmeshed in the race to deeper poverty and joblessness”.

With serious trouble already brewing in northern Nigeria, much of it stemming from the dearth of economic opportunities in the country, Nigeria can’t afford deeper poverty and increased unemployment. Jonathan’s government will be judged on just how well Okonjo-Iweala and her liberal economic policies achieve the reverse. DM


Read more:

  • Okonjo-Iweala’s appointment to enhance drive for reform in NEXT;
  • Okonjo-Iweala’s return: What new direction for money flow? in Business Day Nigeria.

Photo: Ngozi Okonjo-Iweala, Managing Director of the World Bank attends a session at the World Economic Forum (WEF) in Davos January 29, 2010. REUTERS/Christian Hartmann.

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"A long habit of not thinking a thing wrong gives it a superficial appearance of being right and raises at first a formidable outcry in defence of custom. But the tumult soon subsides. Time makes more converts than reason." ~ Thomas Paine

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