Ngozi Okonjo-Iweala, Coordinating Minister of the Economy and Minister of Finance: Interview

Ngozi Okonjo-Iweala, Coordinating Minister of the Economy and Minister of Finance

Interview: Ngozi Okonjo-Iweala

How can Nigeria maintain current levels of GDP growth, and what are the risks?

NGOZI OKONJO-IWEALA: To maintain our current levels of GDP growth, we must overhaul infrastructure, starting with power. Nigeria’s economy has been growing at an average rate of around 7% annually over the last decade with limited power supply. If we can double existing capacity in terms of hours of availability or megawatts, we expect to sustain economic growth of 8% or more.

The unprecedented reforms we have made in privatising the power sector – bringing in independent power producers and private sector players, while using our gas more effectively through the Gas Master Plan – addresses the single biggest constraint to growth. The development of roads, railways, and ports will come in tandem.

Apart from this, we need to invest in several alternative sources of growth, agriculture being the most promising in terms of job creation. We have unleashed this, but we must remain focused and involve the private sector and small farmers as a backbone, encouraging them to see this as a money-making business and less as a way of life. Likewise, President Goodluck Jonathan launched the housing revolution with the creation of the Nigerian Mortgage Refinance Corporation, which will put more liquidity into the system and get the mortgage banks to lend more. This, being a non-tradable source of growth, will have a profound impact on job creation, directly and indirectly. In support of this movement, an agreement was entered with local construction companies to help train plumbers and carpenters.

Considering the fact that oil still contributes 70% to government revenues, the biggest risks revolve around the energy sector, including production quantity drops and price declines.

A sound plan for management on both the expenditure and revenue side, with a special focus on the nominal sectors, will ultimately create success.

What can be done to more effectively manage recurrent expenditures in Nigeria?

OKONJO-IWEALA: There are two things. First, we have to finish work on the Integrated Personnel and Payroll Information System (IPPIS) to weed out ghost workers and ghost pensioners. We have been doing this steadily, putting the entire system on an electronic platform so that we can pay people directly rather than through agencies. Previously, the agencies could simply create extra workers. Second, there are committees and government offices that we can close, thereby streamlining our public service and saving money. We need to work closely with the National Assembly because many of these entities are underpinned by law, but in an emergency, we have to move quickly and efficiently.

Given recent challenges with security, how can Nigeria best manage its perceptions abroad?

OKONJO-IWEALA: This is very difficult, because there is a narrative that has been created about Nigeria that is easy to support. Journalists use this and it grabs headlines – big, corrupt and poorly governed. Now we have added Boko Haram to the mix. These perceptions obscure the good things happening in the country. We need to get the positive stories out as well.

We have one of the 10 fastest-growing economies in the world, at 6.5% in the second quarter of 2014, and we are now the largest economy on the continent and the 26th largest in the world. Additionally, we have become a containment model following our recent successful handling of Ebola, and we strongly believe that the insecurity we currently face will come to an end. In this respect, everything to date is happening in an area that constitutes a very small percentage of the country’s business operating environment. We need to harness these stories and show that, with persistence, it is entirely possible to do business here safely and successfully.

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Ngozi Okonjo-Iweala

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The Report: Nigeria 2015

Economy chapter from The Report: Nigeria 2015

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