Economy Dr. Ngozi Okonjo Iweala as Silverbird Group’s Man of the Year is a feat
earned through a cocktail of daring economic policies by the Goodluck Jonathan
administration especially in 2012, reports Festus Akanbi
a few government functionaries who first emerged from the Presidential Villa,
venue of the closed-door meeting, where the budget was signed, included the
Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi
Okonjo-Iweala.
television stations and which was monitored in Lagos on Tuesday, the CME, who
though was all smiles, declined to speak with the hordes of State House
Correspondents who had kept a vigil at the villa. As it used to be the case,
the journalists were not allowed to cover the budget signing ceremony.
Most of them were however not too surprised the powerful minister declined to
talk on how the issues holding back the budget were resolved despite the
disagreement and controversy that had preceded the budget signing between the
National Assembly and Presidency. Presidential Spokesman Dr. Reuben Abati came
out shortly after with a press statement to announce the signing of the budget.
According to a Lagos-based economic analyst who also monitored the proceeding,
the smiles on Okonjo-Iweala as she left the villa could be described as a sigh
of relief and a sense of fulfillment for crossing yet another difficult hurdle.
Although, her reputation as a brilliant and disciplined public officer is
rising, those close to the Harvard-trained former World Bank Managing Director
said she is not unmindful of the mileage given to her by the support of
President Goodluck Jonathan who has continued to express an unwavering
confidence in her.
commendation and recognition from far and wide. Last year, the influential
Forbes magazine listed her among world’s Most Powerful Women. And just last
week in Lagos, Okonjo-Iweala was honoured as the Silverbird Man of the Year for
2012.
capacity as the Coordinating Minister for the Economy, Okonjo-Iweala under the
leadership of President Jonathan plays a key role coordinating priority
policies and programmes of government.
Anti-Corruption Campaign
The finance ministry, which she oversees, played a critical role in realising
what is possibly the most important response by the administration against
corruption so far.
the nationwide protest that followed the removal of fuel subsidies, set up a
probe committee to investigate subsidy payment to oil marketers. The committee
was headed by the Managing Director, Access Bank Plc, Mr. Aigboje
Aig-Imoukhuede.
government would take action against any proven cases of fraud in subsidy
payments. The minister inaugurated the committee, which did a forensic
investigation of subsidy payments. The result was an extensive series of
forensic investigations targeted at the root of subsidy fraud in order to get
restitution for the country and drastically reduce future occurrences. To
ensure that the good work done by the committee under the Federal Ministry of
Finance was consolidated, the committee was later elevated into a Presidential
Committee.
indictment of 25 firms for various breaches of the subsidy regime; the
investigation of these breaches by the Economic and Finance Crimes Commission
(EFCC) and the Special Fraud Unit have led to on-going prosecutions of various
indicted firms and individuals in the courts.
excesses that led to the breaches are drastically reduced. To encourage good
behaviour and reward firms, which had done the right things, the ministry has
been paying deserving firms which had complied with the procedures.
billion has been retrieved from wrong payments. In all, N232 billion payments
were identified as suspicious. “By the time ongoing investigation and
prosecution regarding the administration of the subsidy regime are concluded,
the exact amount saved will be determined,” a source said.
Sovereign Wealth Fund
With the inauguration of the board of the Nigerian Sovereign Investment
Authority (NSIA) in October 2012 by President Jonathan and an agreement with
the state governors, the SWF has become a reality. By this month, the
investment of the SWF will begin. That means that the country is getting closer
to reaping some benefits. The Nigerian economy will certainly become more
attractive for Foreign Direct Investments (FDI); the culture of unrestricted
spending of unanticipated income will be curtailed. Investments will be based
on sound, clear and beneficial economic/financial parameters. It will also
guarantee the availability of a pool of savings or back-up funds for future
generations. Also guaranteed is the availability of a Counter-Cyclical Economic
Stabilisation Fund, which analysts said would assist in smoothening budget
variations in income over a period of time.
guaranteed the availability of an Infrastructure Fund to provide intervention
in critical areas of the Nigerian economy. The nation’s infrastructure deficit
is a major challenge that requires massive investments in resources. This
benefit will cut across different sectors due to the multi-dimensional nature
of the potential/actual interventions.
Ports Reforms
The reforms introduced last year are meant to tackle inefficiency and corruption
at the ports, which have led to many serious problems including costly delays,
congestion, duplication in fees and loss of revenue for government. The
Presidential Committee on Ports Reform, working with the Coordinating Minister
for the Economy, has achieved some key milestones including the reduction of
the number of agencies operating in the ports by half. The clearance time for
cargoes in the ports has been reduced from 39 days to seven days. Many
challenges remain such as the very bad condition of roads leading to the ports.
This, along with the blocking of the Apapa-Oshodi Expressway, access roads and
adjoining streets by trailers and tankers has worsened traffic problems and
contributed to delays. But the Federal Government is working in partnership
with the Lagos State Government to find sustainable solutions to these and
other challenges. Already, Julius Berger has been ordered back to site and N2
billion has been made available for immediate work on various portions of the
road. An official of the finance ministry said plans for comprehensive
monitoring, traffic control and security are being finalised.
Youth Enterprise with
Innovation in Nigeria (YOUWIN)
This is a flagship response of the Federal Government to the challenge of
unemployment in Nigeria. YOUWIN is a business plan competition to encourage
talented young entrepreneurs to set up new businesses or expand existing
businesses, which will employ other young people. Winners of the competition
get between N1 million and N10 million as well as low interest credit,
mentoring and other forms of support. The first cycle of YOUWIN, which was
successfully concluded recently, has produced 1,200 winners across the country.
The projection is that between 80,000 and 100,000 jobs will ultimately be
created from three initial years of YOUWIN.
External Reserves
As a result of greater prudence in the management of the economy, the country’s
external reserves have been on the rise. As confirmed by the CBN, the external
reserves currently stand at, about $47 billion.
External Rating’s
At a time that the US and other major western economies have seen their
economic ratings go down, better management of the economy by the ministry as
part of the Jonathan government’s focus on repositioning the economy for better
performance has led to an upgrade of the country’s economic rating by major
international ratings agencies. Both Standard & Poor’s and Moody upgraded
the country’s long-term and local currency sovereign credit rating to BB- from
B because of improved financial stability.
Nigeria’s ongoing economic reforms is growing, the globally respected rating
agency, Fitch Ratings, revised the country’s outlook to stable from negative.
Fitch also affirmed Nigeria’s long-term foreign currency Issuer Default Rating
(IDR) at ‘BB-’ and Long-term local currency IDR at ‘BB’. The agency also
affirmed the Short-term rating at ‘B’ and Country Ceiling at ‘BB’.
lowered Nigeria’s sovereign credit outlook to Negative in October 2011 from
Stable, citing the depletion of its windfall oil savings and heightened
political uncertainty ahead of elections at the time.
the Capital Market
Nigeria’s capital market had experienced a serious crisis in 2008 when over
₦8 trillion was wiped off Nigerian stock market capitalisation, following the
banking crisis of 2008,with the All-Share Index falling from a peak of 66,000
points to about 22,000 by the end of 2009.
the decision of the finance ministry to set-up a committee on capital market
resuscitation led by Dr. Kingsley Moghalu, Deputy Governor of the Central Bank
of Nigeria (CBN).
whose outstanding margin loans dampened market activity. Others included
elimination of stamp duties and VAT on stock exchange transaction fees to boost
market activity; improving market liquidity: registration of seven venture
capital funds and one private equity fund and the introduction of market
making.
protection has also been put in place with the incorporation of the National
Investor Protection Fund (NIPF) by the Securities and Exchange Commission (SEC)
to compensate investors with a take-off of # 5 billion.
Also on the list of measures put in place are the new listing rules approved to
incentivise companies in the telecommunication and oil sectors, and SMEs to
participate on the market.
on Market Activity
The immediate fallout of these cocktail of measures is the 35.44 percent rise
in the All-Share Index (ASI) in 2012. Index opened the year at 20,730 and had
risen to 28,078.8 as of December 31, 2012. Since the beginning of 2013, the
market index has risen by nearly 18 percent and its value has risen to NGN 10.7
trillion (a 17.7% increase).
Mortgage System
One of the challenges confronted by successive administrations is the issue of
shelter and available statistics have shown that Nigeria still has a long way
to go as a nation in search of good affordable housing for its teeming
citizens. For instance, only 20,000 mortgages have been completed in Nigeria so
far: a very poor track record for a country of about 170m people. Working with
the Minister of Housing as well as other government agencies, the Federal
Ministry of Finance under Okonjo-Iweala is focused on helping to lay a
foundation for a sustainable mortgage system in the country. It will take some
time but some of the main building blocks are being laid.
situation in Nigeria to have any chance of success, these key problems must be
tackled: Mismatch of loan tenors as businesses are borrowing short-term debt to
undertake long-term projects; high costs of borrowing, given the complaint that
interest rates in Nigeria are also very high (lending rates between 16-22%).
Experts therefore stressed the need for long-term, concessional, development
finance.
two terms as the Nigerian Finance Minister and for her work at the World Bank
where she was one of its managing directors (October 2007–July 2011). She
briefly held the position of Foreign Minister of Nigeria in 2006.
a possible replacement for former World Bank President Paul Wolfowitz.
Subsequently, in 2012, she became one of three candidates in the race to
replace World Bank President Robert Zoellick at the end of his term of office
in June 2012. On April 16, 2012 it was announced that she had been unsuccessful
in her bid for the bank’s presidency, having lost to the US nominee, Jim Yong
Kim. This outcome had been widely anticipated. However, this was the first
contested election for World Bank president after the demise in 2010 of the
Gentleman Agreement that the US would appoint the World Bank president and
Europe would appoint the Managing Director of the International Monetary Fund.
Bio Data
Okonjo-Iweala was born on June 13, 1954 in Ogwashi-uku, Delta State. She was
educated at Harvard University where she graduated in 1977, and Massachusetts
Institute of Technology (MIT), where she obtained her PhD in Urban and Regional
Planning. She joined the World Bank in a career that spanned 21 years as a Development
Economist, Vice-president, Operations, 1989 – 91; Director of Institutional
Change and Strategy, 1995 – 97; Country Director, Malaysia, Mongolia, Laos and
Cambodia, 1997 – 2000; Deputy Vice-president, Middle East Region, 2000 –
2003. In June, 2006, she was Managing Director, World Bank till July
2011.
and a member of numerous boards and advisory groups, including the Clinton
Global Initiative Data and the World Resources Institute. She serves as
Financial Adviser to Several International Investment Groups. An
accomplished author, some of her works include: Chinua Achebe Teacher of Light
– a biography of Nigerian Author, Chinua Achebe co-authored with Tijan Sallah
and The Debt traps in Nigeria: Towards a sustainable debt strategy. She
is married to Dr. Ikemba Iweala from Umuahia, Abia State, and they have four
children.
