Ngozi Okonjo-Iweala: On a mission to build nation’s credibility

Twice she received death threats when she accepted an offer to return to Nigeria as finance minister with a remit to oversee broader economic policy.

And there has been a steady flow of gibes from sceptics in the national press about her willingness to stamp reformist credentials on an administration with plenty of good intentions, but not much of a record as yet for realising them.

So why would Ngozi Okonjo-Iweala give up her role as managing director at the World Bank and risk a hard-won reputation as a stubbornly prudent micromanager and outspoken advocate for change in Africa?

“When I did decide to come, then they unleashed on the internet a barrage of negative and debilitating [comment], and they are still doing it day by day,” she says.

It clearly gets to her how cynical Nigerians can be about government, and how quick they are to tear the country’s reputation apart. But she professes belief in President Goodluck Jonathan and, above all, optimism about her country’s future.

“We could do a little bit of good, not even seeking to change the world, if we could make the budget right and set it back again on a reasonable path; if we could make the business environment better by cleaning out our ports; if we can launch reforms that will give our youth more jobs,” she explains.

Ms Okonjo-Iweala played a central role in rehabilitating Nigeria’s battered image when she last served as finance minister between 2003 and 2006 under Olusegun Obasanjo, the former president. It is something of a coup that Mr Jonathan has persuaded her to come back.

During her last stint in office, she helped persuade creditor nations that an oil-rich part of Africa notorious for its wasteful ways was sufficiently on the mend to merit a write-off worth about 60 per cent ($18bn) of the country’s external debt.

The country began to prosper thanks to improvements in macroeconomic management and market reforms that set free parts of the economy, most notably telecommunications, from the dead hand of the state.

But she returns home with some past progress undermined by four years of directionless government, and fiscal mismanagement that led to tens of billions of dollars in windfall oil revenues being squandered.

Just eight weeks into her new expanded role, Ms Okonjo-Iweala is nevertheless back in combative form, sounding every bit as pugnacious as she was when she last oversaw the nation’s finances.

“The president asked me to come because he felt we needed to rein things in,” she says. Early proof of progress, she says, is that Fitch, the credit rating agency, has just upgraded the outlook for Nigeria from negative to stable.

She defends spending under the last government that depleted the rainy day fund she herself set up, saying it was a stimulus that delivered the equivalent of 5 per cent of gross domestic product during the global downturn. And $1bn has already been set aside for a sovereign wealth fund she is working on, in order to hedge against fluctuations in the world price of oil.

One of her biggest challenges however, will be to roll back a political system grown fat on petrodollars and accustomed to tucking in and forking out. As much as 74 per cent of the budget goes simply towards maintaining the cost of government. She wants to reduce this by 4 per cent before the next election.

An ally from the banking sector says that just having Ms Okonjo-Iweala as the gatekeeper helps deter wayward ministries’ profligate plans. But she has other ideas for cutting costs.

“We’re going first to weed out ghost workers and pensioners … We’ll also look at where we can gain efficiencies in terms of the way we work. We’ve already cut overheads,” she says. Beyond that, the government is seeking public-private partnerships to help build the infrastructure the economy needs, but the state cannot afford alone.

“The whole process of privatising the power sector and making it open to investors requires huge resources – the resources needed to pay off workers so that [the] private sector can come in,” she says. “No matter how much government money we get, it’s not going to deliver the sums we require to build infrastructure, so we’re looking aggressively at public-private partnerships.”

Measures that would go some way to eliminating corruption and waste are on the agenda, too. But these will inflict short-term pain on the population and, if history is anything to go by, will elicit prompt opposition from powerful interests likely to lose out.

Subsidies for fertiliser and fuel are slated for removal. Electricity tariffs are set to increase in what one policy analyst says is “an important precondition for a successful conclusion of the privatisation exercise”, and toll gates are to be introduced on the most important highways.

“You can’t load all these reforms on people without delivering for them. You’ve got to show them at each stage that you are delivering,” says Ms Okonjo Iweala, adding that reforms will be “sequenced in a sensible manner”.

“I’m an optimist about the country,” she says. “One that knows all the warts and sees them, but believes that we can get out of it. Because if we don’t, who will do it for us?”