I’m Back To Fix The Economy
AS she rounded off as a managing director at the World Bank on Friday in Washington, to assume duty from next week for the second time as Minister of Finance, Professor Ngozi Okonjo-Iweala, has described Nigeria as a tough country. This notwithstanding, she said she could not be overwhelmed by the challenges on ground in the quest to put the nation’s economy on the path of recovery and prosperity. Okonjo-Iweala, who was given a clean bill of health after screening by the Senate, said she was encouraged by patriotic zeal to return home and contribute to repositioning the economy. While her colleagues assumed duty last June, she had enjoyed a one-month grace of absence to enable her conclude the process of her disengagement from the Washington-based World Bank. An agency report quoted her as promising that her top priority as minister would be to develop and diversify the national economy such that Nigeria could be less dependent on oil and gas as its economic mainstay. Describing the task as her biggest challenge, Okonjo-Iweala said the economy required fundamental structuring so as to attract more investors. Okonjo-Iweala, has been a steady hand at the world’s largest development institution since 2007, where she has had unique insights into the growing role of developing nations in the global economy. Nigeria is one of Africa’s most dynamic economies but it has enormous problems, including an over-reliance on commodity exports, mismanagement, low investment and a history of powerful vested interests. “Nigeria has to make some fundamental changes, it has to really diversify its economy,” Okonjo-Iweala told Reuters in an interview on Thursday. “The time is now because investors are interested in the country,” she said. She said the manufacturing sector was no longer competitive due to increasing power shortages and bureaucratic hurdles, while the agriculture and services sectors had a lot more room to grow, and a flourishing entertainment industry held great potential. According to the report, one lesson Okonjo-Iweala will bring to bear on her job is that consistent policies and a stable political environment are essential for any economy to flourish. “We have to show policy consistency in all kinds of ways. It builds trust in the economy, it builds a resilience and that helps enormously,” Okonjo-Iweala said. It is the second time in eight years that she is leaving the World Bank to return to Nigeria to help transform the nation’s economy. In 2003 she shook up the country’s finances, fired corrupt officials, boosted transparency and negotiating the cancellation of nearly two-thirds of Nigeria’s $30 billion Paris club debt. “Why am I going back? I ask myself that question too. I’m passionate about my country and if you have skills and your country calls on you to come and help, at the end of the day it’s very difficult to say no” she said. Okonjo-Iweala added that, she was encouraged by President Goodluck Jonathan’s political commitment to reform in the country. “That doesn’t mean I have all the answers. I don’t. The task is daunting,” she said adding: “I hope we’ll succeed but Nigeria is a tough country, and a tough environment, but it is also one of the most exciting countries to do things in.” As Okonjo-Iweala takes the reins of the country’s economy, she is also aware that the global economic environment has become more difficult over the past several months, with an escalating debt crisis in Europe and high public debt in the United States unsettling markets. Some economists have warned the world economy could tilt back into recession, which would likely lead to a decline in demand for African exports and push commodity prices lower. “We will need to look out for the impact on commodities,” Okonjo-Iweala said, adding that demand would be driven by emerging economies like India, China and Brazil that are more important to Africa. She said African policymakers had increasingly maintained sound economic policies that were attracting more foreign direct investment. The region rebounded quickly after the 2008/09 global financial crisis with growth rates now equal to or exceeding pre-crisis levels of above five per cent. Okonjo-Iweala said fewer African nations turned to the World Bank for funding to deal with costlier food prices last year compared to the 2008/09 food and energy price crisis. While this was progress, she said more investments were needed to strengthen the region’s food security systems. She said the famine in the drought-hit Horn of Africa, was “something of a man-made disaster” and blamed it on the collective failure of the international community to bring peace to Somalia. Somalia’s worst affected areas are controlled by al- Shabaab militants, who have prevented food aid from getting to people. An African peacekeeping force has secured about 80 percent of Mogadishu after al Shabaab withdraw at the weekend, opening the way for life-saving food and medicine to get to people who fled to the capital to seek help. “There is a lack of political will by all actors worldwide to try to secure peace” in Somalia,” Okonjo-Iweala said. “You cannot help farmers, and you cannot help pastoralists, unless there is peace,” she added. She said the situation in the Horn of Africa “should not colour the success” Africa has had in recovering from the last financial crisis.