PEOPLE AND POLITICS BY MOHAMMED HARUNA

As Ngozi Returns to Finance Ministry

ndajika@yahoo.com

Yesterday, Dr. Ngozi Okonjo-Iweala, one of three managing directors of the World Bank, and before then Nigeria’s much celebrated Minister of Finance, faced the Senate for the confirmation of her nomination by President Goodluck Jonathan apparently to mind the store once again. By the time you read this, chances are she would have been confirmed by the Senate and appointed by the president to take over from the erstwhile minister, Mr Olusegun Aganga, whose re-nomination as minister had been confirmed by the Senate ahead of Okonjo-Iweala’s but who has since been pencilled down for  another ministry.

Dr. Okonjo-Iweala was much celebrated for her role as Finance minister in the so-called $18 billion debt relief Nigeria got from the Paris Club of public creditors in October 2005. But even before then she had made the now famous list of American Time magazine’s 100 most influential persons in the world for the year, not to mention an article in the London Financial Times about the same period which had described her as “the lady to save Africa,” or some such words.

Perhaps such praise from the international media, of course, duly echoed by a local media that, in a manner of speaking, all too often likes to be more Catholic than the Pope, had gotten into the lady’s head. Perhaps her boss and benefactor, former president, Olusegun Obasanjo, had become envious of his minister attracting more limelight than himself over the debt relief. But in his first cabinet reshuffle after the debt relief, he not only relieved her of the Finance portfolio and sent her to the Foreign Affairs ministry which she presumambly had neither the inclination nor the enthusiasm to manage. He also removed her as the head of his much-fabled economic team that included such well-publicised “Obasanjo Boys” like Professor Chukwuma Charles Soludo, then Central Bank of Nigeria Governor, and the “super-minister,” – late President Umaru Yar’adua’s words - Malam Nasir el-Rufa’i, who was in charge of the Federal Capital Territory but who also doubled as Obasanjo’s Man Friday.

Shortly after what was clearly her demotion, an obviously much chastened Okonjo-Iweala resigned from her benefactor’s cabinet and returned to her old roost – the World Bank from where he had recruited her as a middle ranking official to come and mind the store.

On her return, the World Bank catapulted her from where she left off to the top management. This was clearly in appreciation of her role in the $18 billion debt relief saga touted especially by her admirers as one of the greatest economic miracles in post-colonial Nigeria.

It was as a managing director of the bank that, as the speculations went at the time, Yar’adua tried to woo her back as minister of Finance. She reportedly declined the invitation, presumably still smarting from the wretched treatment she got from Obasanjo, Yar’adua’s predecessor.

President Jonathan has obviously succeeded where his late boss had failed. But her acceptance of the president’s invitation seems to have come with some strings attached by the lady herself. According to Leadership Weekly (July 2), she accepted the president’s invitation only after he had acceded to her conditions of having a free hand to pick the members of his new economic team and to “chart and direct the economy,” albeit consistent with the president’s “Transformation Agenda.”

If the Leadership Weekly is correct – and there is no reason to think it isn’t - Nigeria may yet pay a stiff price for “begging” the lady to come back as Finance minister. Even if the newspaper is wrong, it’s hard to see what extraordinary value the lady would add to our economy that the country had to go all the way to Washington-DC to beg her to return.

The alert reader would have noted that at the beginning of this piece, I’d referred to the $18 billion debt relief she helped secure for Nigeria in 2005 as so-called. The reason is simple; the relief may have been touted as a major economic miracle in post-colonial Nigeria. The truth, however, is quite the contrary.

First, there is a near universal consensus that the debt itself was questionable in its size, to start with. The fact is little or no effort had ever been made to establish its authenticity. Second, as I said on these pages, first on July 20, 2005 before the relief, and second, on November 9, 2005 after the relief, Nigeria was made to pay too stiff a price for it. As I pointed out in the first piece, no less a development economist than Professor Jeffry Sachs who earned his tenured professorship at the Columbia University (an American Ivy League university) at age 28 and is the principal author of the United Nation’s Millennium Development Goals (MDG), said as much on a  lecture visit to Nigeria that year.

“The $18 billion debt cancellation for Nigeria,” he said in Abuja, “is good but it is less good than it should be. The creditors are nasty and stingy. To extract $12 billion from a country with an annual budget of $3 to $4 billion is callous.”

But the payment of $12 to our external creditors at a time our collapsed infrastructures were crying for investment – actually we paid $12.4 billion – was not the only price we paid. As I said in my second piece on the subject, there was also the issue of getting the approval of the Internal Monetary Fund for our so-called Policy Support Instrument as a condition for securing the relief. The PSI was IMF’s notorious one-cure-for-all-ailments SAP (Structural Adjustment Programme) in all but name. And we all know what damage SAP has done to virtually each and every country that has implemented it.

Third, as I also said in my second piece, in spite of all the hype about the debt cancellation giving Nigeria a new economic lease of life, there was no guarantee that our exit from the Paris Club debts was really total. This much was evident from an interview in Thisday ( October 29, 2005) by then French ambassador to Nigeria, Mr. Yves Gaudeul, an interview in which he said the cancellation was a long process in which the exit had to be negotiated individually with each of the 19-member countries of the Club. “There are,” he said, “lots of technicalities to be solved and it takes a long time. I do not know when that will be.”

All of which means that for all we know, we may still be in hock to some, if not all, of the members of the Club.

The bottom line of all this was that the debt relief was in reality a sugar-coated bitter pill which was far more beneficial to its hawkers, namely the Paris Club member-countries and their henchmen - and women - at the IMF and the World Bank - the West’s twin economic policemen - than to the supplicant, assuming it was of any benefit to the supplicant at all.

It should be apparent to even the half-blind by now that Okonjo-Iweala owed her managing directorship at the World Bank to the role she played in forcing the sugar-coated bitter pill down our throats.

This is the lady we have gone on our knees to plead with to return to manage our finances even though it should be obvious that she is more likely to resolve the conflict of interest she would inevitably face between serving International Capital and serving Nigeria in favour of the former.

At the time she was Obasanjo’s minister of Finance, there were well-founded suspicions that the lady had her eyes on the presidency of the African Development Bank (AfDB) fuelled by her lack of enthusiasm in campaigning for Nigeria’s candidate for the job during the election that took place in Abuja several years ago. Partly as a result Nigeria lost the election to Burundi right under her turf.

It is hardly unfair to speculate that the lady has been motivated to return as Finance minister more by the prospects of the AfDB job, which is by far bigger than being one of three managing directors at the World Bank, than by any patriotic zeal to serve mother-country.