JENDA: A JOURNAL OF CULTURE AND AFRICAN WOMEN STUDIES
ISSN: 1530-5686
Issue 9 (2006)
THE WOMAN WHO HAS THE POWER TO CHANGE AFRICA
| JENDA: A JOURNAL OF CULTURE AND AFRICAN WOMEN STUDIES ISSN: 1530-5686 Issue 9 (2006) THE WOMAN WHO HAS THE POWER TO CHANGE AFRICA |
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Paul Vallely ( in Abuja)
First Published in Independent: 16 May 2006
Ngozi Okonjo-Iweala is a heroine not just of Nigeria, where she is Finance Minister, but of the entire continent. Her crusade against corruption has put her life at risk.
The Finance Minister is fulsome in her apologies. “Sorry, it's my first day back in the country and I had to go and see the President. Even so, I do apologise for keeping you waiting.” It is an interesting example of the priorities of Mrs Ngozi Okonjo-Iweala, the woman who has been in charge of the finances of Nigeria for the past three years. First she spends more than a week at IMF/World Bank meetings in Washington, then she briefs her boss, but next she sets aside a couple of hours from a “crazy schedule” to talk to someone from the foreign press. Getting the message out about the change in Africa's most populous nation is pretty high on her “to do” list just now.
As well it might be. One in four of the inhabitants of sub-Saharan Africa lives in Nigeria which has the biggest oil reserves on the continent. It ought to be the powerhouse of Africa. Yet for decades it has languished, paralysed by years of military dictatorship, in a sump of corruption. The year before Okonjo-Iweala took over, in 2003, Nigeria rejoiced in the unenviable reputation as the most corrupt place on earth, according to Transparency International.
But something - an awful lot - has changed. Last year Nigeria was named as one of the 21 most improved countries in 2005. “Some very, very powerful people including the inspector general of police [Nigeria's top cop] have been brought to book. He has been tried, and is now in jail on several counts,” the minister says with a grim smile. “Two judges have been suspended, two sacked outright, three ministers sacked, two rear-admirals, a state governor, top customs officials. Did we get all the people? Not yet - but we've got enough to send a powerful signal and [generate] a powerful fear. People in power now know they can't act with impunity.” The tentacles of her anti-fraud operation have reached down to lower levels too. More than 500 people behind Internet “advance fees” scams have been jailed for frauds estimated to have milked more than $100m a year out of gullible Americans alone. Some estimate total global losses to be more than $1.5bn - causing grievous damage to the reputation of Nigeria.
When she took over, Okonjo-Iweala saw corruption as her number one problem. “But we knew that just talking in vague terms doesn't work. You have to identify the sources and points of corruption and target them.” The worst sector was undoubtedly the oil industry. Her first move was to get President Olusegun Obasanjo to sign up to an international scheme called the Extractive Industries Transparency Initiative - under which oil and other companies agree to publish what they pay and governments open their accounts for inspection by voters. The next move was to audit the oil sector and put the results on the Web to reveal exactly how much the country produced and earned.
She also identified another key anti-corruption area - government contracts. “These were costing almost five times as much as those in neighbouring countries. We set up a unit known as Due Process to audit value for money on public contracts. So far it has saved us the equivalent of $3bn in three years.”
“But perhaps the simplest and most powerful thing we have done is to publish this,” said Okonjo-Iweala, holding up a slim booklet. “Every month the federal government pays out money to state governments as their share of Nigeria's oil revenues. But no-one knew what they got and everyone blamed the federal government for everything.”
So in 2004 she published the detailed figures of what the federal government paid to each state and published it in Nigeria's national newspapers. "The papers sold out. People got so excited saying, 'So my local government gets $300,000 a month. How come there is no chalk in the schools, the teachers haven't been paid, and there are holes in my road?'" The figures became so popular that the President ordered they be published every year. The resulting book - column after column of figures - must be the most boring best-seller every written.
All this has made Okonjo-Iweala powerful enemies. A campaign was launched to discredit her. Now 51, she was recruited from her job at the World Bank in Washington, where she had worked as an economist for 20 years, and where her husband and children still live. (She sees them for only a few days each month). She was hired under a UN scheme to repatriate Africa's best brains which continued to pay her old salary, $240,000, in dollars. A smear campaign implied that this was improper and that she bought a house in Washington - which, in fact, she had owned while at the World Bank - with the ill-gotten gains she acquired as Finance Minister. There were wilfully dishonest attacks on the internet, despite the fact that details of her mortgage were publicly available in the US.
"It was designed to get me out of the job. There had been no secret about my salary. When I had arrived in Nigeria one paper printed it. But all of a sudden the anti-reform element decided they could use it to attack me. They twisted it, trying to sully my name internationally. It was all designed to destabilise the reforms. Luckily for me, I had a very solid reputation and the allegations didn't take." But they printed her home address, where her husband received death threats. “The President doubled my security. But I was never afraid.”
So passionate is she about staying the course that last year she gave up the dollar salary and now earns $6,000, like other Nigerian ministers. Two of her children, whose tuition fees she was paying, have dropped out of college to make it possible. "My kids have made a real sacrifice. It makes me really angry. But I would not quit. I wasn't going to give into that kind of threat.”
Corruption, however, was only the start of the problem. “The first day in the job I sat in that chair and felt overwhelmed. So I drew up a matrix of reforms - showing the order of priority, how they would be implemented, and what the sequence of actions would be.”
One of the first big things she did was to remove the link between government spending and oil revenues. “In the past when we'd had high oil prices they would spend everything we got. And then when the prices were low, the budget was so bad we could hardly meet salaries. It was clear something had to be done.”
What she did was to base the 2004 budget on a very conservative oil price - $25 a barrel when the price was actually more than $40. She then announced to Nigerians how much she had saved each quarter. It gave the people the feeling they were getting quick results from the reforms. And quick she certainly was. She privatised loss-making steel plants and removed restrictions on telecoms, producing an increase from just 450,000 landlines to 16 million. She reduced import tariffs. She increased civil servants' pay but slashed their perks. She introduced reforms in banking, insurance, pensions, income tax and foreign exchange.
All of this doubled economic growth to an average of 7.6 per cent, cut inflation from 23 per cent to 11 per cent, and achieved exchange-rate stability. “Some people say we didn't take care of the impact of the programme on the poorest people. But most people bore it because they could see it was bringing results.”
Not least of these was the deal Okonjo-Iweala secured to get $18bn of Nigeria's $30bn debt wiped away. In the past, Nigeria was excluded from all debt deals because of its oil. But, she argued with the rich world's finance ministers, Nigeria is not an oil-rich nation. Rather it is a poor nation where most of the 130 million population live on less than 60p per day - and one in five children does not reach the age of five. “When you divide up our oil revenues they come to around 50 cents per person a day. Even if oil prices doubled we would still have one of the lowest per capita incomes in Africa.”
When she first applied for debt relief, the finance ministers of the G8 tried desperately to avoid her. But she disarmed them by saying: "Look, I don't want anything from you." Instead her opening pitch was: “Nigeria is turning over a new leaf, we're implementing a very vigorous reform programme. I don't want you to do anything. But watch us perform and if in the next 18 months you believe that we have done well then I'll come back to talk to you about debt relief.”
When she returned she did so with a clever stratagem. If the rich nations wrote off 60 per cent of Nigeria's debt, she said, she would pay off the rest - another $12bn - with the money saved from her budget reforms. It was a controversial tactic. Some Nigerians criticised her for not demanding 100 per cent relief and using the savings for more anti-poverty programmes. “It's a genuine debate - it's a judgement call,” she says, “but in the end 60 per cent of the country support it. It's a very popular decision.”
The truth is that had she not made this offer she would probably not have secured any debt relief at all. What ought to happen now is that Tony Blair should return Britain's £1.7bn share of the $12bn Nigeria has paid back to rich countries - on condition that it it is used to reduce poverty. There is evidence to suggest that this is how Okonjo-Iweala would spend it. “The $1bn a year we would have been paying in service payments,” she says, “we are now putting into health, education, power, water programmes.”
The unprecedented deal that Okonjo-Iweala has secured for Nigeria is a remarkable achievement. “Nobody believed we could do it. I can scarcely believe it myself,” she says, though the weight of what she has achieved was brought home to her rather dramatically recently. “I was walking with a friend at Heathrow airport the other day and a woman ran up to me with two little kids and said, 'Thank you, you have saved my children from a life of having to pay off this debt.' It was very moving.”
The danger is, of course, that her reforms will be set aside when she leaves office. That is why she has made so much information public. Now there is an appetite for openness it will be hard to stop the information flow.
Across Africa many are again looking to Nigeria to become what, four decades ago, it was predicted to be - the giant economy of the continent. “All countries are different but the way we did our programme is a model for Africa,” explains Okonjo-Iweala. “We analysed our problems, we crafted the programme to address them, we set out the measures, we implemented them, and not at the behest of outsiders. Other countries can do it too. You just need to work very hard and be tough with yourself on the reforms that need to be done.”
She has already been approached by other African countries seeking to emulate her success. “Tanzania has just approached us, Togo, Angola - even Egypt is sending a team to look at what we have done on corruption. Would you ever have believed that Nigeria would become a place where people would come to see how to tackle corruption?”
Might she one day attempt further reforms not as finance minister but as president of her native land? “Are you trying to make my life impossible, asking questions like that?” she squeals in mock outrage. "I'm not going to answer.” And she laughs.
She's late.
OKONJO-IWEALA: Sorry, it's my first day back in the country [from the IMF/World Bank meetings in Washington] and I had to go and see the President.
VALLELY: Reading this latest update on the reforms you've put in place since 2003 the breadth and pace of what you have been doing is breathtaking.
OKONJO-IWEALA: It's been amazing to me. No country has undertaken such a wide range of reforms. The pace at which we've managed to go, given the initial resistance, has been amazing. And it's not that we're done - we have huge challenges ahead. The only sad news about the whole thing is that people outside Nigeria don't seem to realise [how much change there has been].
VALLELY: On your first day in the job you sat in that chair and were overwhelmed. You said you didn't know where to start. Where did you start?
OKONJO-IWEALA: I was overwhelmed. But I should start by saying that the President was very much involved. Without his political will none of this could have been done because, as you can see, some of the reforms were very difficult. He has a vision of Nigeria becoming the true economic powerhouse of Africa - 1 in 5 Africans is Nigerian - but we can't go around describing ourselves as the giant of Africa unless we perform. And he cares very much about the MDGs. So I knew I had a president who has a vision for the country, of moving away from the past mismanagement, towards a path of true economic development, growth and job creation - and who is willing for us to do tough things and give us backing.
So even before I began the President gave me his ideas of how we should go forward. To do that, I said to him, we need a team. I had this idea from Amaury Bier, the former deputy finance minister of Brazil before the Lula government. They also did sweeping reforms. And they did it by forming a very tight team that supported each other. So we formed a team, with some really excellent people in it.
The next thing was to draw up a strategy for going forward. Even before I was sworn in in July 2003 the President was due to see Tony Blair and he wanted to put something together to give the British Prime Minister some idea of his plans because the President wanted him to know we were turning over a new leaf and we would need their backing somewhere down the line to back us for debt relief. I put together, with my team - Mrs Oby Ezekwesili, on anti-corruption, and Mr Al Rufi public sector reform issues - a 17 page paper that became the basis for many of the reforms. And Tony Blair was very open to listen to this new Nigeria. We developed a very good relationship.
Next I then laid out a clear matrix of reforms - showing the order of priority, how they would be implemented, what the sequence of action would be. . . . This was where my background at the World Bank was enormously helpful. I knew how to set about ordering a massive task like this. But the joy of it was that this was our plan. There was no-one at the IMF or World Bank telling us what to do.
VALLELY: How different was it from what might have been drawn up by policy people at the IMF or World Bank?
OKONJO-IWEALA: We were much harder on ourselves. That's what ownership brings. We brainstormed it with the President and went over it many times, and owned. If some outsider comes to you and says “do this and that” you end up resisting. You feel something has been imposed on you. But if you decide yourself that you really want to clean up, you are likely to want to tackle the problems sooner and faster.
VALLELY: IMF and World Bank programmes are often criticised for not taking account of the impact of the plan on the poorest people. Did you do that?
OKONJO-IWEALA: We found ways to deal with that better. You'll find people here who'll say we didn't adequately take care of the impact of the programme on the poorest people. But most people bore it because they could see it was bringing them something different. What was so exciting for me was that at the beginning people said: "Oh reform, we've heard that before. This won't go anywhere." There was so much scepticism.
Today that has radically changed. Now, as people discuss whether Obasanjo stays or doesn't stay [by altering the constitution to allow himself a third term as President] they do so in the context of reforms. His supporters say: "We want him to stay because he will continue the reforms". And his opponents say: "We can find someone else to continue the reforms." But the common denominator is that everybody accepts that the reforms must continue. That is a sign of real ownership. I'm delighted because that's some thing that we never had before. The tone has changed.
But that success didn't come easily. When I arrived people said: “Oh, she's an IMF/World Bank spy. She's smuggled herself in to deliver us to these people.” I remember once going on TV and saying: “I learned a lot at my 21 years at the World Bank but anyone who wants to blame any outside organisation for what we're doing is wrong. Please grow up. We have to own our problems and our solutions - and we've had many years of mismanagement, so the solutions are hard.”
VALLELY: So what changed their mind?
OKONJO-IWEALA: They saw what we were doing. They saw that Nigeria, like many places in Africa, now has a new set of leaders - presidents and prime ministers, ministers and policy makers - who are a in a different mode from the previous kind. In Nigerian there's a new generation, a new way of thinking. I'm not saying that the old style people aren't still around somewhere, but the way the reform is being led is in a totally different fashion. We have faced up to some very difficult music. We have analysed our problems and come up with the solutions.
Where do you start if you can't do everything at once? How do you begin? I laid out this matrix. It has five parts:
Each section has targets, a strategy for implementation, an indication of who does what, deadlines, and a section to monitor progress.
VALLELY: What was unusual—unprecedented in Nigeria—was that you then published this matrix on the Internet
OKONJO-IWEALA: Yes, on the website of the ministry of finance: www.fmf.gov.ng. And it was written in a form that Nigerians and the international community could understand see was transparent. So that anybody who wanted to could monitor us. That was a bit of a breakthrough. People were surprised—in the IMF, the donor agencies and so on. And we were honest in it. See here: “Dec 2005 - deadline for privatisation for Eleme-Petrochemicals—now slipped to March 2006.”
VALLELY: You've carried on with this policy of openness. In your address to the Institute of International Finance in Zurich a month ago you published a survey which showed that people perceived that bribery was less of an issue in trade, taxation, procurement and the judiciary. But that they thought it had got worse in utilities. You don't hide that.
OKONJO-IWEALA: We have nothing to hide. Our attitude to this reform has been to show even when we're not doing well. We just discussed this [bribery in utilities] in the economic management team meeting chaired by the president. We think it is because we are midway through privatising our power sector which was at one point collecting only 30 per cent of the monies owed to it—one of the lowest collection efficiency in the world—where we have now given staff collection targets and put them under the gun to collect properly. So they are going to people who should have paid £40 a month, but we're only paying £15, and asking for the full amount. We think people assume the extra is for a bribe. Anyway collection has gone up from 38 per cent to 76 per cent.
VALLELY: There is another table too—on the constraints people perceive there are on business. They see increasing problems with infrastructure, crime, bureaucracy and inflation, but less of a problem with corruption. And after topping the Transparency International poll as the most corrupt nation on earth in 2002 Nigeria has risen six places in the ranking and was named as one of the 21 most improved countries in 2005.
OKONJO-IWEALA: That is the most amazing result. We accept that infrastructure is a constraint - because there was almost no investment in infrastructure in this country for almost two decades. Everything ran down terribly under the military regime. But the fact that corruption is no longer the No 1 item listed is amazing, because before people used to put corruption front, centre and back of Nigeria's problems. So we need to do a lot on infrastructure, but still the fact that corruption isn't perceived as the main problem is a victory.
VALLELY: You saw fighting corruption as your No. 1 task when you took over?
OKONJO-IWEALA: Yes. First and foremost was the anti-corruption and transparency drive. It was the most important thing. But we knew that just talking of fighting corruption in vague terms doesn't work. You have to identify the sources and points of corruption and target them.
VALLELY: Where was it worst?
OKONJO-IWEALA: Everyone said, the oil sector, it's so opaque. So in terms of sequencing the fight the President very bravely enrolled us in the EITI [the Extractive Industries Transparency Initiative - under which oil and other companies agree to publish what they pay to governments who agree in turn to open their accounts for inspection by voters]. We got together a stakeholder group - industry, government, NGOs and private people - and decided the first thing to do was to audit the oil sector and put the results on the web at www.neiti.org and let Nigerians see how much we produced and earned. Some 99 per cent of revenues are now accounted for, with the 1 per cent a discrepancy in recording methods recording between the central bank and others.
We also set up an Oil and Gas Unit in the Ministry of Finance which identified some areas where we should have been paid more tax. So I went to the companies and they paid up more than $300m.
We also identified another key anti-corruption area: public procurement. Our government contracts - for which both international and local companies were supposedly competitively bidding - were costing almost five times as much as those in neighbouring countries. We set up a unit known as Due Process to audit value for money on public contracts. So far it has saved us the equivalent of $3bn in 3 years that would have gone out in inflated contracts. Today you cannot get payment unless you have a certificate that showed the Vale For Money audit had been done.
But perhaps the simplest and most powerful thing we have done it to publish this. She holds up a slim booklet.
People would be constantly saying to me 'the government has not done this or that' and I would tell them that is the job of your state government - in Nigeria things like schools and rural roads are the responsibility of the states. Every month the federal government pays out money to state governments and local governments as their share of Nigeria's oil revenues. But no-one knew what their state government was getting and everyone was blaming the federal government for everything. So in January 2004 I talked to the president and said “can I start publishing in the newspaper what each state and local government gets each month?”. He said 'sure go ahead' and so we published it in the papers. It was very costly but it was so popularthe papers sold out. People got so excited saying “So my local government gets N40m a month, how come there is no chalk in the schools, teachers haven't been paid, how come there are no desks and chair, and there are holes in my road? What did you spend it on?” A conversation took off in the county. It became so popular that the President said publish all the figures for my time in office. So we published a book containing all six years.
She opens book and points to a page at random
Summary of allocation to Delta State and its local governments. This has been one of the most popular publications ever. Every time we print it just disappears off the shelves. The Soros Foundation came and gave us some money to keep publishing it because it was becoming so costly.
VALLELY: It's just column after column of figures. It must be the most boring best-seller every written . . .
OKONJO-IWEALA: I like that. I'll use it! It was a best-seller, but not everyone liked it. Putting information in the hands of the people didn't make me popular at all with the state governors. Some of them felt I was deliberately after them. Even today some of them are still sore. But the bottom line was that it unleashed this national conversation. People began to talk, to question, to write in the papers. It just took off. And things began to happen. And by making all of this public you've created an appetite. When you have gone, if any future government decided to stop the information the people would want to know why . . .
That was indeed the intention. We saw the power of people owning reforms. That's how you make sure the reforms will be sustained, whether Obasanjo or Okonjo-Iweala are here or not. People aren't going to stand for it if they can no longer see the books. People have become excited and are now talking reform, reform.
VALLELY: But giving out information was not enough what else did you do? In 2002 Nigeria topped the Transparency International poll as the most corrupt nation on earth. By 2005 it has risen to sixth from the bottom and was named as one of the 21 most improved countries in 2005. How did you do that?
OKONJO-IWEALA: There have to be consequences for bad behaviour. One of my most brilliant colleagues Nuhu Ribadu [a former police chief] took on the punitive side of corruption as chair of the Economic and Financial Crimes Commission (EFCC), tracking people who had corruptly enriched themselves, bringing them to book. Some people said it was a selective thing - that he was using the EFCC to witchhunt the foes of the president. For me I don't care whether you are friend or foe; if you're corrupt you're a foe of the country.
The bottom line is that there are some very, very powerful people like NR's own former boss, the inspector general of police, who have been brought to book. He has been tried, and is now in jail on several counts. Two judges have been suspended, two sacked outright, three ministers sacked, two rear-admirals, a state governor, top customs officials. Did we get all the people? Not yet - but we've got enough to send a powerful signal and [generate] a powerful fear. People in power now know they can't act with impunity. Governors will be impeached, officials sacked. It's a really strong story.
VALLELY: And you have jailed more than 500 people behind the internet scam which dupes people out of "advance fees" in return for the use of their bank account for an international business deal.
OKONJO-IWEALA: And we're working with Microsoft to find software capable of ending these 419 frauds, as we call them. Unfortunately the fraudsters have shifted their operations to Russia, South Africa, Ghana and francophone African countries
VALLELY: How are things progressing with the repatriation of money filched by former officials and stored in Western banks. I hear the Swiss authorities have become very helpful, unlike the British.
OKONJO-IWEALA: The Swiss have now returned $500 million of stolen resources. Switzerland has set the example.
VALLELY: What about the British?
She gives a long . . . chuckle
OKONJO-IWEALA: Now heaven help me. It's very hard to condemn the British. On debt relief the UK has set the example. Britain has done us proud, especially Gordon Brown who worked immensely hard negotiating with the G8 finance ministers. We needed someone round that table who was in our corner and Gordon Brown did that job.
VALLELY: So why are the British dragging their feet on the repatriation of stolen resources?
OKONJO-IWEALA: It's been more difficult with the British. Our president has raised it many times with Prime Minister Blair. Eventually he returned $3m. We understand there are other monies but while all the discussion was going on those monies left the country and went somewhere else. The UK says it has all these laws . . . but in the end they managed to return us a little bit.
VALLELY: Corruption may have been the biggest problem, but it was by no means the only one. What else was there, and how did you prioritise acting on them?
OKONJO-IWEALA: On my first day I sat in that chair and said Oh My God I can't do this. There are just too many things: we have to reform the budget, to fight corruption, do this, do that. But once I had set out the matrix, which became like a bible, I suddenly got a burst of confidence.
One of the first big things we did was to delink the budget from the oil price. In the past when we'd had high oil prices they would spend everything we got. So they came out of a situation where there was an oil windfall and we didn't have anything. We were the only oil producing country in the world to be losing reserves at a time of high oil prices. And then when the prices fell we crashed - sometimes the budget was so bad that we could hardly meet salaries. I looked back and saw volatile everything had been. It was clear that something had to be done. So what we did was institute a new fiscal rule which removed the link between oil prices and the budget. We based the 2004 budget on a very conservative oil price - $25 a barrel when the price was actually in the $40 and $50s. Any surplus above that we saved - and we announce to Nigerians how much we had saved each quarter. In 2003 we saved $7bn. Today our reserves are at $34bn even after paying off a lot of debt. It gave the people the feeling that they were getting quick results from committing themselves to reforms. And it generated another conversation - “why save? why not spend it on the services we need.” What we used it for was, first, to pay off debt, and now to make big investments in electricity generation.
The other key area of reform was to get the
government out of business it had no business in - to privatise
certain areas [like the loss-making Ajakuta and Delta steel plants
plus aluminium, petrochemical, insurance and hotels enterprises] and
to liberalise and deregulate certain sectors which the government had
previously directly controlled - telecoms was the great success here,
the number of phone lines has risen from just 450,000 land lines to
16 m GSM lines - probably 17m by now, for every minute we speak a few
more GSM lines are added.
Then there was reforming the public
sector - strengthening the civil service (which was once one of the
best in Africa but which had been undermined by the corruption of the
military regimes which forced to good people to leave), building
capacity, getting civil servants to support the reforms. When the
British were here [as the colonial power] they organised things so
the government controlled and paid for everything. The government
built houses for civil servants, paid their utility bills. For years
Nigerians just left the system unchanged. Civil servants would earn
very little in salary cash but they would have huge benefits - cheap
rent, allowances, cheap or free utility bills. It had enormous costs
for government. So we “monetised” the system, putting up
their salaries, selling 25,000 government houses in Abuja alone to
civil servants, charging them proper prices for their electricity and
phone bills: if someone else pays their phone bill then the person
can talk for ever, now they pay their own. It has been costly because
you have to pay people cash up front but down the line it will become
a significant cash saving.
VALLELY: All this is only part of what you've done. You've reformed banking, insurance, the foreign exchange market, pensions and income tax. You've reduced import tariffs. You've more than doubled economic growth from a sluggish 3 per cent to an average of 7.6 per cent. You've cut inflation from 23 per cent to 11 per cent, and achieved exchange rate stability. But you've made a lot of enemies in the process, among those who profited from the old system. You've endured a smear campaign over the fact that your salary initially continued to be paid by the United Nations, in dollars, in a program to repatriate Africa's best brains - and that you own a house in Washington where your husband and family continue to live.
OKONJO-IWEALA: The smear campaign was designed to get me out of the job. The anti-reform people thought: “She's come from Washington she won't be able to take it if we start blasting her name.”
When the President asked me to do this job I was in the World Bank, making my career. I'd just been promoted the year before. We had three children all at university each costing $40,000 a year. My husband and I were paying their tuition from our salaries. So when this call came to come and be the minister I said I couldn't afford it. [A Nigerian minister's salary is around $6,000 a year]. So I told the president No but he said “Look, we'll find a way.”
There had been no secret about my salary [$240,000 - what she earned at the World Bank where she had worked for two decades]. When I had arrived in Nigeria one paper printed my salary. But all of a sudden the anti-reform element decided they could use it to attack me.
Before I took this job I had been working at the World Bank for 20 years, living in Washington. So of course I owned a house there. My husband is a surgeon; he works there and my children live there. But anti-reform elements hired Internet bloggers to make out that there was something dishonest about it. They said things like "it is not clear whether she bought the house since she became Finance Minister or before" even though in America all that information - on the mortgage, the amount, the date it was taken, the price of the house - is public. They twisted it trying to sully my name internationally. It was all designed to destabilise the reforms. Luckily for me I had a very solid reputation and the allegations didn't take. But they gave out the address, which is what upset my family. Anybody could have pitched up there and done anything.
VALLELY: And you had had death threats.
OKONJO-IWEALA: Yes, direct threats to me and one to my husband at our home. He got very upset. So the President doubled my security. But I was never afraid.
VALLELY: But you did, last June, give up the dollar salary and now earn just $6,000 a year, like other Nigerian ministers.
OKONJO-IWEALA: Two of the children have taken years off college to allow me to do it. My kids have been lovely. They have made a real sacrifice. It makes me really angry. I gave up so much to do this job - being with my family, most of all because we are so close. That has been the hardest thing. And in return people go beating you over the head. But I would not quit. I wasn't going to give into that kind of threat.
VALLELY: Perhaps the most remarkable of your achievements has been to get $18bn in debt relief for Nigeria. In the past no-one would give it because Nigeria is an oil-rich country.
OKONJO-IWEALA: The first thing I had to convince people is that Nigeria is not an oil rich nation. We're a poor nation with population of 130 million - one in five Africans is Nigerian - and when you divide up our oil revenues you find that they don't come to much. It's around 50 cents per person a day. Even if oil prices doubled we would still have one of the lowest per capita incomes in Africa.
VALLELY: You had to convince the rich nations' finance ministers of that.
OKONJO-IWEALA: When we first started G8 finance ministers would see me and say Oh My God she's coming to talk about debt. And they all tried desperately to look the other way. The first time I tried to get to see Gordon Brown at the annual meetings [of the IMF and World Bank] in Dubai his people kept saying he was in a meeting. Eventually they said he could see me for just five minutes so the first thing I said was: “Look I don't want anything from you.” I said: “Nigeria is turning over a new leaf, we're implementing a very vigorous reform programme. I don't want you to do anything. But watch us perform and if in the next 12 to 18 months you believe that we have done well then I'll come back to talk to you about debt relief.” Nigeria had never been able to sustain any reform programme so people thought it was a bit of pie in the sky. But I was rock solid sure we were going to do it. So I would tease them.
After 12 months I thought we could go and chat to the Paris Club. They said: “it sounds fine. But sign up with IMF so we know what you're really doing.” So I said the Nigerian people had a referendum in the mid 80s where they decided against an IMF programme. So politically it's a non-starter. We're getting the results; why do we need the IMF? Because, they said, we can't all send a mission to verify what you're doing. So I said, well let the IMF come to monitor us, we won't mind that. And that's what happened; we got to own all the pain and the gain and the IMF just observed.
VALLELY: And eventually the rich nations to write off 60 per cent of your debt, and then you paid the rest off, another $12bn, with the money you saved from your budget reforms. No-one believed you would ever be able to pull off that double coup.
OKONJO-IWEALA: The debt deal is our biggest achievement. Nobody believed we could do it. I can scarcely believe it myself. I worked so hard, all night, all day, I'd never worked so hard in my life - chasing after G8 ministers, EU ministers, going to Japan, being able to persuade all these people. But we needed a champion and Gordon Brown became that. He was wonderful. So was DFID [the British government Department for International Development]. They supported us with analysis and getting Treasury to focus on the issue. The World Bank did a lot of analysis which helped us. And the IMF kept and open mind on the way we were doing things. We're very grateful. It's like a dream really. I'm still waiting for it to sink in.
VALLELY: Some people have criticised you for paying of the 40 per cent instead of holding out for a complete write-off and using your new reserves on anti-poverty programmes?
OKONJO-IWEALA: There's been a debate here with some people saying we shouldn't have paid off the $12.4bn. It's a genuine debate - it's a judgement call - but in the end 60 per cent of the country support it. It's a very popular decision. I was walking with a friend at Heathrow airport the other day and a woman ran up to me with two little kids and said: "Thank you, Thank you, you have saved my children from a life of having to pay off this debt." It was very moving.
VALLELY: A number of those you have put in charge of the reform programme are women. Are women less corrupt than men?
She [laughs]
OKONJO-IWEALA:Of course, of course! Seriously, as an empirical observation, women tend to be more honest, more straightforward, more focused on the job, and bring less ego to it. I don't know if it's a feminine instinct but running an economy is sometimes akin to running a household which is after all the smallest unit of production and consumption in the economy. Women also understand something else. It is that if your child is a drug addict and he comes home and says: “I'm ready to give it up” you don't say “You'll never give up you're hopeless.” You don't reinforce their bad self-image but you look at what they've been doing wrong and help them to improve. You support them every inch of the way. Nigeria is changing and it needs the support of the international community to continue to change.
VALLELY: In what ways? What are the biggest challenges which now face you?
OKONJO-IWEALA: We have done a lot but there are still enormous challenges. We still have to fight corruption head on; even though its coming down, the levels are still relatively high so we just need to keep on. But the biggest challenge we face is to ensure that the impact of reform is felt at the grassroots where people still say “The roads haven't improved enough. We don't have water. Or electricity.” People have been deprived for so long and they want quick results yet it takes three to four years.
We also have to create more jobs and diversify the economy away from oil. We have now pulled in $3bn in foreign investment ($1 bn in telecoms, $600m in banking and the rest spread over agriculture, manufacturing and so on). And we have an estimated $3bn in remittances too; Africans living abroad are beginning to have a lot more confidence in the way we are running things and they are brining their money back.
Those are two very good signs but we still have this challenge to improve things on the ground for the ordinary people. So we're making a big push now - taking the $1bn a year we would have been paying in debt service payments and putting it into health, education, power, water. On average economic growth for the past three years was 7.6 per cent.
Agriculture is doing very well, mining, construction and real estate, and some sections of manufacturing. So we're hoping that we'll get to 10 per cent but even if we can achieve 8 per cent sustainable annual growth that will enable us to make sustainable progress towards the MDGs [the Millennium Development Goals to halve world poverty by 2015].
But the challenge of vested interests has not gone away. They may be a little cowed now but they are still waiting to rear their head. We're trying to do customs reform and it keeps getting blocked. It's the last bastion of corruption. Even though the President gives us his backing it still gets blocked. So we still have that to get through.
VALLELY: Some people say your reforms may not outlast you? What are you doing to prevent things reverting after you and President Obasanjo have gone?
OKONJO-IWEALA: Do you know who is the president of Switzerland?
VALLELY: No.
OKONJO-IWEALA: Exactly. And it doesn't matter. You don't give a damn. But people are pouring money in to Switzerland because it has the rule of law, the core institutions and the predictability that make people feel safe. We need that in Nigeria, so that it doesn't matter whether Okongo-Iwaela or Obasanjo are here, whether there is a third term or no third term. Right from the start . . . we focused on having to have a way to ensure the sustainability of these reforms, not through individuals but by locking them into appropriate legislation. Fiscal responsibility, transparent budgeting, results-focus, accountability for results, punishment if you don't deliver - there are bills enshrining each of these which are with the National Assembly and should be passed very soon. And as well as the legislation we've tried to put an institution around them so they will last [- the Nigerian Extractive Industries Transpacency Initiative, the Economic and Financial Crimes Commission, the Independent Corrupt Practices Commission and so on.] It's nice if you can get individuals who will push more reforms but we have to go beyond that to institutions - that's what sets developed nations apart from developing ones
VALLELY: Outsiders often talk about Africa as if it were one place rather than 54 very different nations. It is always dangerous to generalise, but having said that do you think that what you are doing in Nigeria is a model for the rest of Africa?
I think so. And in several ways. All countries are different but they way we did our programme is a model for Africa. We analysed our problems, we crafted the programme to address them, we set out the measures, we implemented them, and not at the behest of outsiders like the IMF. Other countries can do it too. You just need to work very hard and be tough with yourself on the reforms that need to be done
We already have countries asking us about what we have done. They don't necessarily want the entire package. They want to know how we have done some specific aspect of the reforms - Tanzania has just approached us, Togo, Angola. Even Egypt is sending a team here to look at what we have done on corruption. Would you ever have believed that Nigeria would become a place where people would come to see how to tackle corruption?
VALLELY: If President Obasanjo decides not to stand for a third term, would you be a candidate for the presidency?
OKONJO-IWEALA: Are you trying to make my life impossible, asking questions like that? I'm not going to answer that.
VALLELY: When a politician won't answer a question that usually means the answer is Yes
OKONJO-IWEALA: I don't think of myself as a politician. I could give you a straightfoward No. But even commenting on running will set all sort of speculation and people will start trying to attack me for that. So I'm not being coy, I've not really thought about it. If there was some compelling reason why. . . I don't see why a woman can't run a country. But I'm not contemplating running. I will continue to serve as much as I can.
She turns to her aide
Am I a politician? Have I become one?
Citation Format:
Paul Vallely. “The Woman Who Has The Power To Change Africa”JENDA: A Journal of Culture and African Women Studies: Issue 9, 2006.
Copyright © 2006 Africa Resource Center, Inc.