Nigeria’s Minister for Finance and Former Managing Director of The World Bank Dr. Ngozi Okonjo Iweala recently wrote a book “Reforming the Unreformable – lessons from Nigeria.” The 202 paged book is published by MIT Press and retails at about $24.95.
Check out a description of the book by Gwendolyn Mikell, Professor of Anthropology and Foreign Service at Georgetown University.
Reforming the Unreformable: Lessons from Nigeria by Dr. Ngozi Okonjo Iweala
MIT Press, Cambridge, Massachusetts, 2012, 202 pp., $24.95 (cloth).
Ngozi Okonjo-Iweala’s story of Nigeria’s claw-back from economic volatility, infrastructural and institutional disrepair, and rampant poverty to greater stability is exceptional. It could only have been written by a Nigerian in the trenches during the process of economic restructuring and governance reform.
This story is told in satisfying detail. It provides key economic insights in readable language and frank descriptions of the challenges faced by the economic team she headed as minister of finance from 2003 to 2006. She assesses the positive as well as ambiguous results of macroeconomic reforms implemented during President Olusegun Obasanjo’s two terms. She tells the story dispassionately, credits Obasanjo with foresight, identifies her own strengths and errors during the process, and is gracious as she describes how some tried to engineer her failure or throw roadblocks into the process.
The popular critique held that Nigeria could not come out of its economic slump because of the “curse” of oil wealth, militarism, state involvement in the economy, and corruption at state and local levels. But Okonjo-Iweala demonstrates this to be untrue. By 2007, Nigeria was able to stabilize the macroeconomy, reduce inflation, double economic growth to 6–7 percent, and start rebuilding the education and health systems. She shows that bold national leadership, paired with concern for citizen wellbeing, can be a powerful force in changing an economy.
Among the lessons from the Nigerian experience Okonjo-Iweala outlines for reformers are the need for a playbook that an economic team can follow, for effective communication, and for a results-oriented focus that enlists civil society and the public. The political will of the domestic leadership was important, she says. But Nigeria’s turnabout was Janus-faced: it also required strategic assistance and partnerships with the international community.
Brazilian businessman Amaury Bier, for example, told her to assemble “an Economic Team of like-minded people who can stick together and to fight tough battles,” while U.K. Prime Minister Tony Blair and World Bank President James Wolfensohn advised her that a macroeconomic reform strategy could open the door to successful discussions on debt relief down the road.
Okonjo-Iweala stresses the relevance of African history in designing strategies for economic reform. Nigeria’s oil-induced economic nightmare and recovery were affected by the history of ancient ethnic and cultural/religious communities, divide-and-conquer colonialism, and the 1967–70 Nigeria-Biafra war followed by 25 years of military rule and agricultural and social decimation. But she believes governance always makes the difference.
Top successes included reducing leakages in the budget process, implementing an oil price–based fiscal rule that enabled more transparent budgets, reaching macroeconomic stability by 2006, increasing foreign reserves, reducing inflation and lending rates, and achieving 7 percent growth. In 2003, the Obasanjo government began privatization, deregulation, and liberalization.
The greatest challenges were reforming the civil service to improve service delivery and rationalize pensions and eliminating the corruption surrounding trade, tariffs, and customs. Poorly educated civil servants bolstered their meager salaries by permitting the elite to divert revenues of government agencies and use those revenues to bolster their status as regional benefactors. Word is that Okonjo-Iweala’s sudden transfer in 2006 from minister of finance to minister of foreign affairs was due to her unwillingness to condone abuses by politicians in rice importation who used those revenues to cultivate party loyalties.
The story takes Nigeria watchers backstage and shows us the complexity of initiating macroeconomic reforms in an African society whose diverse political classes have benefited from resource mismanagement, financial liquidity, agricultural collapse, educational decimation, and citizen impoverishment. Okonjo-Iweala shows how daunting it was to break the hold of politicians over oil revenues and push Nigeria toward stable, diversified, market-driven, and socially responsible economic governance.
Okonjo-Iweala, who after four years at the World Bank returned in 2011 as finance minister under President Goodluck Jonathan, ends by looking forward, recognizing that Nigeria’s success can help transform Africa. She asks whether the reforms will be sustained and lead to Nigeria’s continued growth and, if they are, whether they can be a role model for the rest of Africa. She returns to the importance of support and monitoring by the global community, as well as Nigeria’s continued commitment to fighting corruption, strengthening the macroeconomic framework, and advancing financial sector reform.
We are left to ask, “Will this last?”