This article is from the (RED) edition of The Independent, guest-edited for 16 May 2006 by Bono. Half the revenue from the edition will be donated to the Global Fund to Fight Aids.
The woman who has the power to change Africa
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.
Tuesday 16 May 2006
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 Mrs Ngozi 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, Mrs Ngozi 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 Mrs Ngozi, 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 Mrs Ngozi 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 Mrs Ngozi 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 Mrs Ngozi 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 Mrs Ngozi 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 Mrs Ngozi. "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.
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