Erstwhile World Bank vice president and one-time Nigeria’s finance minister Dr. Ngozi Okonjo-Iwueala was a guest at Ted, a platform of world’s greatest thinkers and doers recently where she urged the Western world to take advantage of the reform and democratization going on across Africa to invest and help Africa stand on their feet instead of churning aids to the Black continent. Excerpts:
Africa:
Dr. Ngozi Okonjo-Iwueala: Talk about a different Africa. There are some allusions to Africa you hear about all the time. Africa of AIDS, Africa of malaria, the Africa of poverty and the Africa of disaster. It is true that those things are going on but there is an African you don’t hear about. Sometimes, I’m puzzled. I asked myself why. This is Africa that is changing. This is African of opportunity. This is African where people want to take charge of their destiny and this is an African people are looking for partnership.
Talk about changing Africa?
Dr. Ngozi Okonjo-Iwueala: On 15, 2005, Mr. Martins Diepreye Alamieyeseigha , a governor of one of the oil rich state of Nigeria was arrested by London Metropolitan police on a visit to London. He was arrested because there was a transfer of $8 million that went into some dormant account that belong to him and his family. This arrest occurred because there was cooperation between London Metropolitan police and the Economic and Financial Crime Commission of Nigeria led by one of our most able and courageous people Mr. Nuhu Ribadu. Alayemesal was arraigned in London. Due to some slip off, he managed to escape dressed as a woman and ran from London back to Nigeria where according to our constitution, those in office as governors, presidents as in many countries have immunity and can’t be prosecuted.
What Happened:
Dr. Ngozi Okonjo-Iwueala: People were so outraged by the behavior that his state legislators impeached him and get him out of office today Alamieyeseigha is in jail. People in Africa are not willing to tolerate corruption from their leaders. This is a story that people wants their resources managed for them for good and not taken out to places where the benefits is just for a few.
Corruption:
Dr. Ngozi Okonjo-Iwueala: When you hear about corrupt Africa, corruption all the time, I want you to know that the people and the government are trying hard to fight it in some of these African countries. Some success are emerging and there is still along way to go. The will is there and successes are being choked up on this very important fight. When you hear about corruption, don’t just feel that noting is being done about it or that you can’t operate in any African countries because of the overwhelming corruption, that is not the case. There is a will to fight and in many countries that fight is being won.
Africa and Dictatorship:
Dr. Ngozi Okonjo-Iwueala: In countries like Nigeria where there has been a long history of dictatorship, the fight is on going and we have along way to go. But the truth of the matter is that results are showing, independent monitoring by the World Bank and other organizations show that in many instances, the trend is downward in terms of corruption and governance is improving. A study by economic commission for Africa show a clear trend upwards in governance in 28 African countries.
Why Blame Africa alone about corruption:
Dr. Ngozi Okonjo-Iwueala: When people talk about corruption, you immediately think about Africa. That is the image of African countries. But think of it. If Alamieyeseigha was able to export $8 million into an account in London. If the other people who are taken money estimated at $20-$40 billions of developing countries sitting abroad in the developed countries, what is that? Is that not corruption? In this countries, if you received stolen goods, were you not prosecuted?
Asset Recovery
Dr. Ngozi Okonjo-Iwueala: When we talk about this kind of corruption, let us think about what is happening on the other side of the globe where the money is going and what can be done to stop it.
I’m working on an initiative on asset recovery with World Bank. I’m trying to do what we can to get the money that has been taken abroad back to developing countries. If we can get the over $20 billion dollars sitting out their back, it may be far more some of these countries that all the aids that is being put together.
Will for reform
Dr. Ngozi Okonjo-Iwueala: African are tired of being the subject of everybody charity and care. We are grateful but we know we can take charge of our own destiny if we have the will to reform. What is happening in African countries now is the realization that no one can do it but us. We have to do. We can invite partners who can support but we have to start. We have to reform our economies, change our leadership become more democratic, be more open to change and to information and this is what we started to do in one of the largest countries in the world which is Nigeria.
NIGERIA
Dr. Ngozi Okonjo-Iwueala: If you are not in Nigeria, you are not in Africa. One if four sub-Sahara African is Nigerian. And it has 140 million dynamic people, chaotic people but very interesting people. You will never be bored. What we started to do was to realize to take charge and reform ourselves. With the support of a leader who was willing at the time to do the reform, we put forward a comprehensive reform program which we developed ourselves, not the International Monetary Fund (IMF), not the World Bank where I worked for 21 years and rose to be a vice-president. We put together a program that will get states out of businesses they shouldn’t being in first instance. The states should not be in the business of producing goods and services because it is inefficient and incompetent. We decided to privatize many of our enterprises. As a result, we decided to liberalize many of our markets. Can you believe that prior to this reform which started at the end of 2003 when I left Washington to go and take the position of a finance minister, we had a telecommunications company that was only able to develop 4500 landlines in its entire 30 years history.
Telephone
Having a telephone in my country was huge luxury. You have to bribe and do all sort of things. When President Obasanjo supported and launched the liberalization of the telecommunication sector, we went from 4500 to 32 million GSM lines and counting. Nigeria’s telecoms market is the second fasted growing market second only to China. We are getting investment of about a billion dollars a year in Nigeria and nobody knew except the smart ones.
The smartest one first to come in was the MTN company of South Africa. In the three years that I was finance minister, they made an average of $360 million per year in a country that is a poor country with an average per capital income just under $500. The market is there. When they kept under wrap, soon others got to know. Nigerians themselves began to develop some wireless telecommunications companies and three or four others have come in. But there is a huge market out there and people don’t know about it or don’t want to know.
Privatization is one of the things we’ve done and the other things we’ve done is to manage our finances better. We introduced a fiscal rule that de-link our budget from the oil price. Before we used to just budget on whatever oil we bring in. Oil is the biggest, most revenue earning sector in the economy. We began to budget at a price slightly lower than the oil prices and put aside whatever was above that price. We didn’t know we could put it off. It was very controversial but what it immediately did was volatility that has present in terms of our economic development where oil prices were high, we will grow very fast and when oil prices crash, we crash and could hardly pay any salary in the economy. We were able to save before I left $27 billion dollars and it went into our reserves whereas when I arrived in 2003 we have $7 billion and as we speak now, we had about $40 billion due proper management of our finances.
The exchange rate which used to fluctuates all the time, is now fairly stable and being managed so that business people have predictability of prices in the economy.
We brought inflation down from 28 percent to about 11 percent and we had GDP growth from an average of 2.3 percent the previous decades to about 6.5 percent now. All the changes and reforms we are able to make have shown up in results that measurable in the economy.
What is more important is we want to get away from oil, and diversify. There is so much opportunities in Nigeria as in many other African countries. What was remarkable was that much of these growths came from non oil sector. Agriculture grew at over 8 percent, housing and construction etc.
This is to illustrate to you that once you get the micro economy straighten out, the opportunities in various other sectors are enormous. We have opportunities in agriculture, Like I said. We have opportunities in solid minerals. We have a lot of minerals that where no one has even invested in as much. And we realized that without proper legislation, that will not happen. It has now gotten the proper code. We have opportunities in housing and real estate. In a country of 140 million people, no shopping wall as you know them here. These are investment opportunities for someone that excited the imagination of people and now we have business in these malls are doing four times the turn over that they had projected.
Investment Opportunities
Dr. Ngozi Okonjo-Iwueala: Huge things in construction, real estate, mortgage market, financial services. We have 89 banks, too many and not doing the real business of banking. We consolidated them from 89 to 25 by encouraging them to increase their share capital base from $25 billion to $115 billion. It has attracted a lot of foreign banks to invest in the economy and the banking sector.
Barclays bank of the UK is bringing $500 million, Standard Chartered has brought $140 million and I can go on and on.
We are doing the same with the insurance sector.
In tourism, in many African countries, a great opportunity and that is what many known East Africa for. The wild life, the big elephants and other animals but managing the tourism market in a way that can really benefit the people is very important.
OPENESS
Dr. Ngozi Okonjo-Iwueala: There is a new wave on the continent. A new wave of openness and democratization in which since 2000 more than two third of African countries have had multiparty democratic election. Not all of them have been perfect or will be but the trend is very clear. Since the past three years, the average rate of growth on the continent have moved from about 2.5 percent to about 5 percent per annum. This is better than the performance of OECD countries. Things are different in Africa now. Conflicts are down on the continent from about 12 conflicts a decade ago to about three now including Darfur.
These conflicts have neighborhood effects. If one conflict is happening in a country it is like it is happening in the whole continent. One thing we should know is that African continent is not a continent of one country. It is a continent of many countries. And if we are down to three or four conflicts, it means that there are plenty of opportunities to invest in a stable, growing and exciting economy where there is plenty of opportunities.
Way forward
Dr. Ngozi Okonjo-Iwueala: The best way to help Africans today is to help them to stand on their own feet. And the best way to do that is by helping create job. There is no issue with fighting malaria and putting money in that and saving lives, that is not what I’m saying. That is fine. Imagining the impact on the economy if the parents are employed and make sure that there children go to school and can buy the drugs to fight the disease themselves. If we can invest in places where you yourselves make money, wealth creating jobs, and helping people stand on their feet, is that not a wonderful opportunity. Isn’t that is the way to go?
African Women
Dr. Ngozi Okonjo-Iwueala: I want to say that some of the best people to invest are the women. African women who against all odds have developed and grew their business to world class. One of them is Nike Okulesi who is making children cloth which she started as a hobby has grown to world standard. She uses or mixes African materials with materials from elsewhere has reached a stage where she even have orders from Wall Mart. 10,000 pieces. The women are diligent, focus, work hard. I can go on and on. Beatrice Gakuva who open up a flower business and is now exporting to the Dutch auction in Amsterdam and is employing 200 women and women. However, most of these industrious women are starved of capital to expand because nobody believe outside of our countries that we can do what is necessary. Nobody thinks in terms of our market, nobody thinks there is opportunity. But I’m sanding here to let you know that those who missed the boat now will miss it for ever.
If you want to be in Africa think about investment. I invite you to explore the opportunities in things that will do good for the continent
