By The Editor
Dr. Ngozi Okonjo-Iweala’s impressive credentials in economic management have been aptly recognised by the Cyril Ramaphosa-led government of South Africa. Nigeria’s loss of the Harvard- and M.I.T.-trained development economist at the end of the Goodluck Jonathan-administration has become South Africa’s gain.
The international development expert and two-time Nigeria’s finance minister now resumes in Pretoria as a member of the nation’s Economic Advisory Council. This is a top level strategy group recently appointed by the president for a three-year term for members in the quest to proffer solutions to the economic challenges facing the nation.
Ramaphosa has expanded the council and apparently its role in economic policy formulation with the appointment of Okonjo-Iweala as a member.
South Africa faces daring economic challenges with the economy down to the worst performance record since the global financial crisis in 2008. The economy declined by 1.4 percent in the last quarter of 2019 and managed to inch up 0.2 percent for the year.
In a frantic effort to chart a way back to normal growth, Ramaphosa has called on Okonjo-Iweala to ‘come over to Pretoria and help out’. The council is an economic think-tank that will shed the light and lead the country out of its current economic difficulties.
The council is charged with responsibilities for ensuring greater coherence and consistency in economic policy implementation and taking steps to ensure that both government and the people are enabled to respond appropriately to changing economic circumstances.
The council is studded by local and international economic thought leaders and the president expects it to advise his government on broad macro-economic issues of fast-tracking development and implementing economic policies that spur inclusive growth.
It stands as a non-statutory and independent body that brings together prominent economists and technical experts drawn from the academia, the private sector, labour union and other stakeholders.
The South African move is read as a demonstration of real commitment by the country’s leadership to deal with the knotty issues plaguing the economy. The president has a job to do and he has looked beyond political and national boundaries to get it done. His move is considered an exemplary decision and a pace-setting landmark for Africa.
Despite that the South African economy is in recession, the people are in no way comparable to the poverty level of Nigeria – that now parades as Africa’s largest economy. Africa’s biggest economy – Nigeria – is as well the poorest of the biggest five economies in the continent. Nigeria is therefore seen as deserving of the likes of Okonjo-Iweala’s expertise in stimulating the economy much more than South Africa.
Okonjo-Iweala is reputed as having what it takes to get an economy going in the right direction. She put in 25 years at World Bank as a development economist, rising through the ranks to the number two position as the bank’s managing director. She holds many honours and doctorate degrees from several renowned universities in the world.
While she served as minister of finance in Nigeria, Okonjo-Iweala took steps that powered economic growth to achieve an average of 6% GDP growth per annum over a space of three years. She is credited with developing reform programmes that helped improve transparency in government, rebalance government expenditure to step up capital spending and build up economic buffers to ensure stable economic performance across market cycles.
The processes she initiated worked extensively to reduce macroeconomic volatility and helped to improve overall macroeconomic management quality. She brought into governance initiatives that closed some loopholes for corruption as far as was possible, reinforced budget implementation process, tackled excessive recurrent spending and renewed the confidence of investors in the Nigeria economy.
While she was finance minister, she spearheaded negotiations with the Paris Club of creditors that relieved Nigeria of a debt burden of $30 billion. The debt exit provided the nation a new opportunity for rapid economic growth and development.
In the effort to shut a major window of corruption in government, she championed the cause of withdrawal of subsidy on petroleum products. The effort soon unearthed big ticket frauds where subsidies were claimed and paid on vessels that never entered Nigeria’s shores. In other extreme cases, locally-refined products were reportedly loaded into vessels and passed as imported products for subsidy claims.
Her tenure in the finance ministry launched Nigerian banking through the cashless policy into the 21st century. The policy closed the loopholes for money laundering and opened the chapter for the development of modern electronic banking channels that have since become the standards for the banking industry. The reduction in the volume of paper currency in circulation – a direct result of the cashless policy, modernized the payments system, reduced the cost of currency management and the risk of moving cash.
She spearheaded the establishment of Sovereign Wealth Fund (SWF) in 2011 – a special purpose investment vehicle for national governments that have become a key component of global assets under institutional management. In 2015, Nigeria’s fund was ranked the second-most transparent sovereign authority in the world in the year 2014 by Linaburg-Maduell. The survey covered fifty-one global sovereign wealth authorities and Nigeria’s was the only African sovereign wealth authority that made it to the ranking.
Nigeria’s hosting of the World Economic Forum on Africa in 2014 is yet another major feat accomplished by Okonjo-Iweala. She placed Nigeria on a global record of being the second country in sub-Saharan Africa after South Africa to host the forum.
The apex regional economic summit, organized by the Switzerland-based World Economic Forum, brought together Africa’s best intellectuals from across economic sectors to deliberate on the continent’s most pressing socio-economic issues. The event attracted close to $70 billion in new investments to the African continent and reached a global audience of about 2.1 billion people through the social media, according to official estimates.
Collaborations between her ministry and other federal ministries and agencies of government created the Subsidy Re-investment Programme (SURE-P) and other people-empowerment programmes meant to create jobs and lift people out of poverty.
During her tenure as the finance minister and coordinating minister for the economy, Nigeria rebased its GDP for the first time in 24 years. Out of the exercise, the country emerged as Africa’s largest economy, a big milestone attained towards joining the club of the world’s 20 largest economies.
Okonjo-Iweala is the first female finance minister and the first female foreign affairs minister in Nigeria. She is also the first female and black candidate to contest for the presidency of World Bank Group in 2012.
A renowned economist and international development expert, Okonjo-Iweala sits on the board of social media giant, Twitter, and also chairs the board of the African Union’s African Risk Capacity.
In addition, she heads the board of the Nelson Mandela Institution. Okonjo-Iweala was also the co-chair of the Global Partnership for Effective Development Cooperation and chairman of World Bank Development Committee.