ON the sidelines of the World Economic Forum (WEF) in Cape Town in March 2013, I chaired a book launch starring Nigeria’s formidable first female finance minister, Ngozi Okonjo-Iweala, resplendent in her trademark African traditional dress and matching head-gear. She talked unpretentiously without the affected foreign accent of some Nigerians that have spent two decades abroad. She had recently published a book Reforming the Unreformable on her time – between 2003 and 2006 – as finance minister of Africa’s largest economy, which received surprisingly few reviews in Nigeria. Okonjo-Iweala had been the architect of the deal to pay off Nigeria’s $30 billion debt (the second largest such debt deal with the Paris Club of creditors at the time), and led a team of technocratic reformers seeking to tackle corruption, build efficient public and private institutions, and transform the country into an emerging economy.
Without any notes, Okonjo-Iweala gave a fluent, inspiring, and intrepid presentation, breaking down complicated economic concepts in ways that were easy for the general audience to digest. She berated Nigeria’s failure to create a system of sound planning and financial management of its oil resources; described Herculean efforts to fight vested interests at great personal cost; detailed how she had used her impressive international network to achieve Nigeria’s debt deal; observed that Nigeria’s political class appeared to be intimidated by its economic technocrats; and brushed off concerns about women not being equal to men. Nicknamed Okonjo-“Wahala” (Troublemaker) by Nigeria’s lively press, this was a virtuosic performance.
My impression of Nigeria’s “Iron Lady” was of an incredibly competent, courageous, and intelligent individual with a strong sense of public service. I, however, also had the impression of a diva who was aware of her own importance, clearly enjoyed her celebrity status, and came across as a “head-of-state in waiting”. Okonjo-Iweala is not shy about blowing her own trumpet and her role in the Nigerian reform team, talking of the “legitimacy and dynanism that I brought to the team”. Forbes named her among the 10 most influential women in the world in 2011, while Foreign Policy listed her among the top 100 global thinkers in the same year. The 60-year-old technocrat’s brilliant economic credentials are from the prestigious Harvard and Massachusetts Institute of Technology (MIT) – where she had obtained her doctorate. It is clear that the poor grasp of complex economic issues that many of Nigeria’s political leaders and parliamentary dunderheads have exhibited is what has given technocrats like Okonjo-Iweala their immense power, and a belief that they can take better decisions than the leaders they seek to advise.
Okonjo-Iweala grew up in a solidly middle-class Nigerian family with both parents being professors. Her upbringing was a happy, idyllic one full of ballet classes and piano lessons until the Nigerian civil war of 1967-1970 forced her family back east, having lost all their savings. Her father was recruited into the Biafran army. Living on one meal a day, watching children dying, and sleeping on the floor of a bunker were formative experiences that made Okonjo-Iweala determined to succeed, and perhaps also contributed to her three-decade exile in graduate school and at the World Bank in Washington D.C. where she rose to become vice-president in 2002.
Okonjo-Iweala avoids such personal details in Reforming the Unreformable and focuses squarely on her time as finance minister between 2003 and 2006. Despite the technical subject matter, the book is highly readable, rich in detail, and devoid of complex economic jargon. The story is well told and presents a bird’s eye view of Nigeria’s chronically underperforming and staggeringly corrupt state. The book covers the strategies of Okonjo-Iweala’s “Economic Team”; the efforts to address the structural constraints to private enterprise through liberalisation; restructuring the civil service, trade, tariffs, customs and banking sectors; the battle against corruption; the titanic struggle to achieve the annulment of Nigeria’s debt; and the lessons learned from the reform process.
In an impressive example of South-South sharing, Nigeria’s reforms were inspired by Brazil’s experiences. Under Okonjo-Iweala’s leadership, the “Economic Team” – including individuals such as Charles Soludo, Nasir Al-Rufai, Obiageli Ezekwesili, Nenadi Usman, Nuhu Ribadu, and Bode Augusto – develops the National Economic Empowerment and Development Strategy (NEEDS) which set out to tackle poor economic management; weak public institutions and poor governance; the failure of the state to deliver public services; and a hostile environment for private-sector growth. The team sought to bring rationality to a deliberately irrational process designed to enable widespread graft.
A controversial Excess Crude Oil Account (ECA) was created to ensure that savings for the future could be used to stabilise the management of Nigeria’s finances. To increase transparency, Okonjo-Iweala published monthly in national newspapers the funds that state governors and local governments received. A major achievement of the reforms was the liberalisation of Nigeria’s antiquated telecommunications sector. Banking reforms also saw the consolidation of banks from 89 to 25 and the increase in their capital base from $15 million to $192 million. A competitive bidding process for contracts saved the country $1.5 billion in two and a half years. The climax of this rich story is undoubtedly the historic debt deal of 2005. The agreement led to Nigeria’s first-ever sovereign credit rating, and non-oil sector foreign direct investment doubled from $2 billion to $4 billion following the accord.
Okonjo-Iweala is honest in admitting that her reform efforts could have benefitted more from cultivating cabinet members and consulting more with civil society and the civil service. Changes were often pushed through with the assistance of the notoriously autocratic president, Olusegun Obasanjo, without proper intellectual debate and disagreement or wide consultation with key interest groups. It is almost as if some of the genuine opposition to reforms is treated as treasonous, and critics of reform are sometimes unfairly branded as being part of corrupt “vested interests”. The reformers often come across in the book as a secret society and cabal of unaccountable priests championing a religion of neo-liberal reform. Such dogma was, however, not to be challenged, and anyone who tried, was branded a heretic to be burned at the stake.
The NEEDS strategy turned out to be a top-down plan imposed on the country without proper and widespread consultation and buy-in from critical civil society actors. The Nigerian civil society actors in the book remain mostly nameless and faceless. Their criticisms of NEEDS is never spelt out or explained. One does not have a sense that there was any serious engagement with these groups. The core of Nigeria’s intelligentsia is caricatured as “inclined towards socialism”. Okonjo-Iweala tends to lump all opponents of reform together, sometimes blurring the line between opportunistic vested interests and genuine intellectual opposition. The views of Nigerian economists and think-tanks are also completely absent from the book, even as Western scholars like Jeffrey Sachs are admiringly cited. Indigenous solutions to these deep-seated problems clearly do not seem to have been taken as seriously as external advice.
In terms of other reforms, the author frankly concedes that customs reform was an “outright failure”. There were also glaring supervisory and regulatory failures that led to a severe banking crisis in 2008/2009 which nearly destroyed Nigeria’s financial sector. The “panacea” of privatization turned out to be a mirage. For all her undoubted brilliance, Okonjo-Iweala has several blind spots. Her criticisms of the World Bank and the International Monetary Fund’s (IMF) diabolically devastating 20-year socio-economic experiments – the Structural Adjustment Programmes (SAPs) – on African guinea-pigs from the 1980s, involving large enforced cuts in health and education and consistently wrong advice, and conducted in an utterly unaccountable manner that often undermined the democratic wishes of African populations, are extremely muted. Critics have charged her with lacking a political antenna: she received much blame for the bungled efforts to eliminate oil subsidies in 2004 and 2012, underestimating the widespread anger and cynicism of the Nigerian public towards a corrupt and corpulent political class that was not trusted to spend, in the public interest, any surpluses resulting from removing oil subsidies.
After serving as the widely-respected Managing Director at the World Bank (its second most powerful position) between 2007 and 2011, Okonjo-Iweala returned to Nigeria in the enhanced position of minister for the economy and finance. Her “second coming” has, however, not proved to be as messianic as the first, confirming the observation that there are no second acts in life. The great debt deal – the marquee achievement of Okonjo-Iweala’s first term – is being reversed under her very nose as Nigeria’s external debt rose to $9.38 billion and its domestic debt to 8.9 trillion naira by June 2014. Her impeccable integrity of the first term has been increasingly questioned. Accusations have increased of her turning a blind eye to graft to pursue greater political ambitions. In February 2014, the governor of Nigeria’s Central Bank, Sanusi Lamido Sanusi, blew the whistle on an alleged $12-20 billion in missing funds from the accounts of the Nigerian National Petroleum Corporation (NNPC). Okonjo-Iweala investigated and noted that the missing amount was closer to $10.8 billion, demanding a forensic audit of the NNPC. Will Nigeria’s “Iron Lady” fall on her sword if these funds are not properly accounted for?
• Dr. Adebajo is Executive Director of the Centre for Conflict Resolution in Cape Town, South Africa.