Do you think that recent attacks on the Minister for Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala are justified?
As humans, it is easier to forget the pleasant things we had enjoyed in the past, especially when faced with adversity. As government makes difficult changes on the way the economy is structured and people begin to feel uneasy, some people have begun to question the credibility of those managing the economy. As the finance minister and the coordinating minister for the economy, Okonjo-Iweala has come under attacks with some questioning her continued stay in office. I therefore believe that the attacks are baseless and unjustified.
Why do you say that the attacks are unjustified?
It will be worth the while to remind us of Okonjo-Iweala’s commitment, passion and determination to make sure that a sustainable economic structure is put in place.
First, when Dr Ngozi Okonjo-Iweala was appointed Finance Minister in 2003, Nigeria was burdened with debts inherited from several military regimes. Relying on the commitment of the then President, Olusegun Obasanjo, to get the debt extinguished, Okonjo-Iweala used her experience and connection in the international banking system to get the debts written off and freed Nigeria from a debt burden that had crippled the development of infrastructures in the country.
To this end, she spearheaded negotiations with the Paris Club of Creditors in 2005 that led to the wiping out of US$30 billion of Nigeria’s external debt, including outright cancellation of US$18 billion. Secondly, before she was appointed finance minister, allocations to states and local government areas were shrouded in secrecy; whereas transparency is seen worldwide as one of the benchmarks of democratic rule. She introduced transparency into the allocation system and people now know how much their state governors and local governments have collected as allocations. This is still the case today.
Agreed that she supervised the process for wiping out our debts, she is also now reported to be leading us towards accumulation of another set of debts?
Nigeria is no longer heavily indebted. The reason for the recent rise in debt-to-GDP ratio is because Nigeria has had to resort to domestic borrowing to finance its burgeoning recurrent expenditure. She had made sure that Nigeria did not borrow money to finance infrastructure. One of the issues the Coordinating Minister dealt with is the charge, made by the Chair of the Committee in the media that the country is racking up debts under Dr Okonjo-Iweala’s watch as Finance Minister. As shown in her response, there is no substance to the charge. In fact, the opposite is true. Right from her Senate confirmation hearing in 2011, the Minister had identified rising debt as a major challenge which the country needs to confront. Under the leadership of President Jonathan and working with the Debt Management Office and the Budget Office of the Federation, the Minister followed through with a robust approach which includes progressive reduction of borrowing, quick settlement of due debts and the retirement of N75 billion of maturing bonds via a Sinking Fund dedicated to paying off substantial bonds. These measures have produced clear results as shown in the reduction of borrowing from N852 billion in 2011 to N571.9 billion this year.
She had repeatedly said corruption hurts the economy, yet the world continues to see Nigeria as a very corrupt country?
Beginning from 2003 when she was first appointed finance minister, Okonjo-Iweala objected to massive corruption in the country and had used the budgeting system to fight corruption even though those at the helms of affairs in civil service have remained uncooperative. She tightened the budget and blocked many loopholes through which funds meant for development were siphoned out of the system. For her efforts at sanitising the system, Okonjo-Iwela incurred the wrath of the top echelons in the civil service. Am sure very soon, the world will begin to see the results of her efforts in the fight against corruption. Don’t also forget that many people were jailed for corruption in this country.
Under her watch, the economy continued to grow but the common man could hardly feel the effect of the growing economy.
Don’t forget that when the world economy plummeted, Okonjo-Iweala assured Nigerians that the nation’s economy would not be affected. She ensured that the economy was shielded from the volatility of the world economy. Why some big economies suffered major blows from which they are yet to recover, Nigeria economically remained stable.
During her two stints as Finance Minister, she worked to combat corruption, make Nigeria’s finances more transparent, and institute reforms to make the nation’s economy more hospitable to foreign investment. The government unlinked its budget from the price of oil, its main export, to lessen perennial cash flow crises, and got oil companies to publish how much they pay the government.
She has continued to attack corruption and accelerate privatization and liberalisation of the economy. She signed Nigeria up to the Extractive Industries Transparency Initiative, a voluntary standard for petroleum and mining industries. She managed to reduce Nigeria’s inflation by half.
Inspite of many challenges which government has acknowledged, the Nigerian economy is showing real and measurable progress in many areas. This can be seen in the fact that more jobs are being created; roads, rail and other infrastructure are being improved; the country is saving for the future and planning better for the present. The Jonathan administration, contrary to the impression given by some critics, is making impact in the areas that, according to credible opinion polls, Nigerians are most passionate about.
For instance, on job creation which is a central focus of the administration, a total of 1.6 million jobs were created last year, according to the National Bureau of Statistics (NBS) of which 250,000 were seasonal jobs created in dry season farming in 10 northern states. In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government’s special intervention programme the YouWin project supported young entrepreneurs, creating over 18,000 jobs. The SURE-P Community Services programme has also created 120,000 job opportunities. Okonjo-Iweala is running for the long haul. Her goal appears to be the institutionalisation of an economic structure that runs itself no matter who is at the helms of affairs; not an easy task. She has continued to diversify the economy and focusing attention on non-oil sector. In the past and for too long we have had to rely heavily on oil alone. At present, the Nigerian economy growth is being driven by non oil sector, thanks to Okonjo-Iweala. One other thing you cannot take away from her is that she understands the Nigerian economy and knows what to do to grow it. But as she said in her response to the 50 questions posed to her by the House of Representatives, vested interests had continued to make reforms difficult.
One of the major problems that the Minister of Finance has always had with the House of Representatives has been her alleged inability to provide the statistics of the much touted economic growth and development of the economy; what is your take on that?
The improvement in federal highways has been confirmed by many Nigerians who travelled over the Christmas and New Year holidays. Key highways which have witnessed significant progress include Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road. Preliminary work has commenced on Lagos-Ibadan road and the Second Niger Bridge has been inaugurated and the government has promised that it would be completed in four years. These are monumental achievements that no matter the level of propaganda the opposition mounts, are promises kept and you can imagine the level of economic activity and jobs that would be created with that project alone.
Another major project is the Railway Modernisation Programme involving the construction of standard gauge lines. The 1,124 km Western line linking Lagos and Kano is now functional, while work on the Eastern line linking Port Harcourt to Maiduguri is about 36 per cent complete. The Abuja-Kaduna Standard Gauge line has attained 68 per cent completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77per cent completed, will be completed next year. The annual passenger traffic on our railways has increased steadily: rising from 1 million in 2011 to 5 million in 2013. You know that this administration inherited a lot of comatose infrastructure but in the last three years.
The Federal government had dredged about 72 km of the lower River Niger from Baro in Niger State to Warri in Delta State; and completed the construction of the Onitsha inland port; while the Baro port is nearing completion. The result of all these is that we now have all-year round navigation around the lower Niger; and we are already witnessing an increase in cargo volume from below 2.9 million metric tons in 2011 to over 5 million metric tons on the inland waterways. As in the case of the rail transport, the number of passengers travelling via our inland waterways has increased fourfold from 250,000 in 2011 to over 1.3 million. All these have been made possible through the prudent management of the scarce resources by Okonjo-Iweala as so much is being saved and channelled back to the resuscitation of these infrastructures. Of course key milestones recorded in 2013 include the construction of nine dams, which resulted in an increase in the volume of the nation’s water reservoir by 422 million cubic meters. Progress was made on major projects such as the South Chad Irrigation Project, the Bakolori Irrigation Project, and the Galma Dam. Implementation of irrigation and drainage programme resulted in increase of the total irrigable area by over 31,000 hectares, job creation for about 75,000 farming families and increased production of over 400,000 metric tons of assorted irrigated food products.
In the aviation sector, about 22 airports across Nigeria are being remodelled and upgraded. In 2013, we completed the upgrade of 11 airport terminals and works on the remaining 11 terminals are in progress. The Enugu Airport is now operational as an international airport with a new terminal under construction.
We have also commenced work on the construction of three new international airport terminals: in Lagos, Kano, and Abuja. Modern navigational and meteorological systems were installed at our airports to improve air safety. In addition, 6 airports namely: Jos, Markurdi, Yola, Jalingo, Lagos and Ilorin which are strategically located in proximity to food baskets have been designated as perishable cargo airports and international standards perishable cargo facilities are being developed at these airports. A new Cargo Development Division has been established in FAAN to give focus to this effort.
One of the many issues that have been raised has been that inspite of the huge investments in power, the power distribution has been epileptic; what is your view?
The President Jonathan administration has done a lot in terms of power distribution and generation, it has completed one of the most comprehensive and ambitious power sector privatization and liberalisation programmes globally. For instance four power generation companies have been privatized and 10 power distribution companies, and have virtually settled all claims and entitlements of PHCN workers. Some major cities got an average of 16-18 hours of electricity per day in 2013. This however dropped in November and December during the transition; it is expected that there would some teething problems and then power supply should pick up. In 2013, the government mobilised $1.5 billion in financing from multilateral sources for investment and upgrade of the transmission network in 2014 and beyond. To promote clean energy, the federal government also commenced construction of the 700 megawatts Zungeru Hydro-Power project in 2013. It has strengthened relevant power market intermediaries such as the Nigerian Bulk Electricity Trading Plc (NBET), and backed them with financing to stimulate greater private investments in the sector. It also launched the National Industrial Revolution Plan (NIRP), which focuses on industrialising Nigeria and diversifying our economy into sectors such as agro-processing, light manufacturing, and petrochemicals. In the 2013 fiscal year, Nigeria was named the number one destination for investments in Africa by UNCTAD (the UN Conference on Trade and Development), attracting over $7 billion in Foreign Direct Investment (FDI).
There were a large number of both foreign and domestic investments in the economy, such as $250m investments by Procter and Gamble in Ogun State and $40 million in agricultural projects by Dominion Farms. To further support the manufacturing sector, the Government successfully negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners, which would enable us to protect our strategic industries where necessary. The Nigerian Enterprise Development Programme (NEDEP) was initiated in 2013 to address the needs of small businesses. Some key interventions by NEDEP include supporting small companies with access to affordable finance, access to markets, capacity support, business development services, youth training, and support in formalising their operations. In addition, in 2013, we reduced business registration costs for small businesses by 50 per cent, to help them conserve capital. Finally, as a result of our backward integration policies, Nigeria is now a net exporter of cement and expanded cement output capacity from 2 million metric tonnes in 2002 to 28.5 million metric tonnes in 2013.