Why you should care
Because Nigeria’s finance minister thinks you should stop feeling sorry for her country — and start investing in it.
Poor, corrupt and hopeless — that’s how Nigeria looked just 10 years ago, but now it’s Africa’s second-largest economy, and its future is increasingly promising.
Africa’s most-populous nation is growing twice as fast as its continental rival, South Africa, and holds nearly as much in foreign reserves, around $50 billion. Nigeria’s GDP may be smaller — $292 billion to South Africa’s $354 billion — but it is expected to catch up soon. The country’s GDP per capita also doubled from $1,400 in 2000 to an estimated $2,800 in 2012.
Africans have to start looking after themselves and working and trading with each other.
The secret weapon behind Nigeria’s economic renaissance? Ngozi Okonjo-Iweala: the minister of finance and economy since 2011, who has led landmark reforms to combat corruption, reduce foreign debt and attract investment.
With a bachelor’s degree from Harvard and a Ph.D in regional economic development from MIT, Okonjo-Iweala spent 12 years at the World Bank, including five as managing director. In 2012, she narrowly lost an election to Jim Yong Kim to become the institution’s next president, despite winning the support of the Financial Times and Newsweek, which declared that if the competition “were a normal process, Jim Yong Kim wouldn’t stand a chance.”
Source: Jacquelyn Martin/Corbis
Impressive CV aside, what makes this 59-year-old exceptional is her character. An optimist by nature and a realist by trade, Okonjo-Iweala is determined to change the world’s perception of Nigeria — and Nigerians’ perceptions of themselves.
“We are fed a diet of negativity about ourselves these days, and we must not allow that to stand,” she claims. “Africans have to start looking after themselves and working and trading with each other,” she adds.
An advocate of economic liberalism, Okonjo-Iweala is a booster for privatization and cutting governmental spending. And as one of just a few female finance ministers in the world, she considers her gender an advantage. “Being a woman makes you able to deal with a lot of things — and still keep sane,” she told The Guardian in a 2005 interview. “I think women have less ego. If someone’s saying things to make me feel bad, I don’t care as long as I get the job done.”
And getting the job done as the mother of four, she is quick to draw parallels between economic management and parenting: “If your child has been doing bad things and they come to you and say, ‘Mother, I want to change, please help me,’ would you say, ‘No. You’re hopeless. You can’t change?’”
There are many roadblocks on Nigeria’s path to prosperity — debt, corruption and oil dependency — and Okonjo-Iweala aims to eliminate them one by one.
Okonjo-Iweala believes in Nigeria’s potential for change. “It’s a country of spirit, entrepreneurship, drive of creativity, and I want all Nigerian people to know it’s a country that we can be proud of,” she says.
But there are many roadblocks on Nigeria’s path to prosperity — debt, corruption and oil dependency — and Okonjo-Iweala intends to eliminate them one by one.
She took her first major step in 2005 with an initiative that convinced the Paris Club of Creditors to cancel $18 billion (60 percent) of Nigeria’s external debt. Her vigorous campaign, which focused on investing Nigeria’s savings towards reaching the country’s Millennium Development Goals, convinced lenders to forgive most of the debt in exchange for paying off the remaining 40 percent with a portion of the nation’s energy revenues.
Next? Attract foreign investment — but to do so, Okonjo-Iweala needed to improve Nigeria’s business reputation by tackling its endemic corruption. She introduced the Advance Fee Fraud and Other Fraud Related Offences Act in 2006 and implemented new transparency practices such as publishing states’ budgets in the press.
Okonjo-Iweala also volunteered information to the Transparency International Group, a watchdog that had called Nigeria “the most corrupt place on Earth” in 2003 but now applauds efforts that have recovered $33 million to Nigeria’s coffers and locked up corrupt officials such as James Ibori, a governor who embezzled $79 million. And in May 2011, the ministry drafted tougher money-laundering policies and freedom of information legislation that allows citizens to access public records so they can hold officials and institutions accountable.
“Does it mean the problem is over?” Okonjo-Iweala asked in her TED Talk. “The answer is no. There’s still a long way to go, but that there’s a will there. And those successes are being chalked up on this very important fight.”
The minister’s next challenge was convincing western nations to invest, reforming Nigeria’s economy to make it more hospitable to foreign business and less dependent on oil. So far the country has managed to attract foreign investors in not only energy but also banking and telecoms. In 2012 alone, Nigeria received a net inflow of $85.73 billion in foreign direct investment, much of which came from Nigerians living abroad, mainly in Europe.
Okonjo-Iweala’s efficiency has won admiration in the West. Time magazine called her “one of the world’s heroes”; Forbes named her one of the world’s most powerful women; and former U.K. Prime Minister Gordon Brown hailed her ”a brilliant reformer.”
Yet she has also faced criticism, mostly for failing to use the country’s oil income to ease the poverty that affects 60 percent of the population. Despite a decade of 7 percent economic growth, poverty in Nigeria has worsened. Many citizens were similarly outraged by Okonjo-Iweala’s $240,000 salary, considerably higher than the $6,000 base ministerial salary, which she defends by insisting it is temporary, with the extra cost coming from a government-organized and donor-supported Diaspora Fund.
Okonjo-Iweala’s 2011 decision to remove a popular oil subsidy also cost her support, especially among the poorest citizens who perceive cheap fuel as the only benefit they receive from the government. Gas prices doubled and widespread disapproval led to the “Occupy Nigeria” protests in January 2012.
Her opposition also regularly accuses her of promoting the interests of Western finance ahead of Nigeria. Many blame Okonjo-Iweala’s policies for reducing funding to agriculture, a sector that still accounts for two-thirds of Nigerian jobs, in favor of sectors more attractive to foreigners such as telecommunications.
“I don’t think she is doing anything wrong,” counters Yet Zainab Usman, an expert in Nigerian economics at Oxford University. ”The problem is structural. It is crucial to grow the economy, but the industries that are driving growth — mostly oil but also banking and telecoms — are not job-generating ones. They require very skilled labor, and in a country with 70 percent illiteracy, this gap will inevitably take time to close.”
Okonjo-Iweala is determined to make Nigeria one of the world’s top 20 economies by 2020. Many in her country aren’t so optimistic, but it is her grit and belief in what’s possible that have already turned Nigeria into an example for other developing nations and a partner for wealthier countries.
“If you really want to be in Africa, think about investing,” she urges developed nations. “Because those who miss the boat now will miss it forever.”