The Return of Ngozi Okonjo-Iweala

By Ugochukwu Ejinkeonye

When President Goodluck Jonathan appointed Dr. (Mrs.) Ngozi Okonjo-Iweala Finance Minister and also named her the “Coordinating Minister of the Economy (CME),” I was greatly surprised that several Nigerians appeared to share the president’s rather lofty expectations that she was coming with fresh, workable ideas to turn the country’s ailing economy around.

*Dr. (Mrs.) Ngozi Okonjo-Iweala, Nigeria's Minister of Finance
and Coordinating Minister of the Economy (CME)

If it were in 2003 when most Nigerians who were encountering her for the first time were unduly tantalized by the then President Olusegun Obasanjo’s lavish stress on her impressive credentials as a brilliant World Bank expert who had accepted to make the “great sacrifice” of coming here to salvage our country’s economy, their naivety and misplaced enthusiasm could easily have been forgiven.  

But what would ever remain inconceivable is how any person or group of persons could stretch optimism far beyond its malleable limits to invest such high hopes in the capabilities of a person who had served as finance minister and head of the Economic Team in a regime under which unprecedented earnings from crude oil exports had translated to further deterioration of the economy and untold suffering among the populace.  

But I must hasten to add that I was not part of the celebratory din that greeted Okonjo-Iweala’s first coming in 2003. Even when Obasanjo, characteristically, introduced high drama to the already noisy scene by electing to pay her salaries in US dollars instead of naira, as a reward for her “great sacrifice” and anticipated unprecedented quality service to the country, some of us were still not impressed. 

*Ugochukwu Ejinkeonye

I had repeatedly urged Nigerians in my newspaper column at that time to moderate their optimism, wondering when the World Bank became so popular in this part of the world that association with it instantly earned one the distinction of possessing the vision, workable ideas and capacity to guide the Nigerian economy out of the woods. 

It was shocking that we were actually embarrassing the World Bank by forcing on it and then applauding it for some capacities and goals it neither seemed to possess nor even sought to achieve by conveniently forgetting that this same body had never even attempted to shed its hard-earned reputation as a soulless institution whose prescriptions to developing countries like Nigeria have mostly compounded their economic woes and multiplied miseries among their citizens. Largely viewed as lacking in human face, and often treating the citizens of the affected countries as mere disembodied statistical figures, their “expert” solutions mostly end up distinguishing themselves as great boulders hanging on the necks of countries battling to swim out of the angry deep. 

*President Goodluck Jonathan

I must admit, however, that it was most unfair to expect from Mrs. Okonjo-Iweala a creative approach to policy formulation or any new ideas about economic recovery except the same stale, less-than helpful “remedies” the IMF/World Bank had been recommending to developing countries for ages.  She would never dare to deviate from the “approved” script. And so, once she got to her desk as Obasanjo’s Finance Minister and head of the much vaunted Economic Team in 2003, the first policy statement she unleashed was that in a country of teeming unemployed population, massive retrenchment exercise should immediately be undertaken in the Civil Service.

That was when she introduced to the national lexicon two innocent-looking but actually spine-chilling compound words, namely, “down-sizing” and “right-sizing” in the Civil Service. At that time, the Federal Service employed only about 200, 000 Nigerians, but as most Nigerians knew, what they took home as salaries would pale to insignificance when compared with the monumental amount squandered to maintain Obasanjo’s battalion of aides, many of whom were saddled with overlapping functions.  But that hardly mattered at that time, since the target always was the long-suffering masses.

*Nigerians Protesting the Removal of 'Fuel Subsidy'
(Sunday Alamba/AP)

The script Okonjo-Iweala was reciting was, however, not new. It had the familiar scent of an IMF conditionality, smuggled through the back door by a licensed agent of the Bretton Woods Institutions, who had taken advantage of the abject naivety of the country’s leadership which had allowed itself to be always overwhelmed by its undue fascination with anything from abroad. And with irresistible vigour, charm, motherly voice and mien and innocent-looking and please-trust-me-I-mean-well face (which have also been deftly deployed since her second coming to make a strong case for the inevitability of the removal of the “subsidy” on fuel), Mrs. Okonjo-Iweala presented the mass retrenchment exercise as our sole hope of saving our economy from collapse, adding pleasantly her now familiar slogan that the hardship it would unleash would only be temporary.

And she chose the most troublous and painful period to seek to unleash this policy, namely, the same period her good friend, the then FCT Minister, Mr. Nasir el-Rufai, was rendering many families and peoples homeless in Abuja by wantonly demolishing their houses. Imagine a retrenched husband and wife and their starving, out of school children suddenly having no place to call a home.  Should it then shock anyone that the “fuel subsidy” was brazenly removed at a time the country was in deep mourning and gripped with benumbing fear because of the wanton killings of innocent Nigerians flourishing in some parts of the country, indeed, just few days after the Christmas Day massacre at a Catholic Church at Madalla, Niger State, which attracted global grief and condemnations. Also, many Nigerians who had traveled for Christmas were trapped in distant towns and villages due to the sudden hike in transport fares as result of the new fuel price, with some having no money again to even sustain themselves where they were,  let alone return to their stations.

 

 The Brains Behind The Fuel Subsidy Removal:
FROM LEFT:President Goodluck Jonathan; IMF Managing
Director, Ms. Christine Legarde and Nigeria's Minister of Finance, Mrs. Ngozi Okonjo-Iweala(PRESIDENTIAL VILLA, ABUJA,  MONDAY - 19/12/11)

It does seem that Okonjo-Iweala tends to overstretch the reach of her endowments and appeal, so much so that she fails to notice when she has stopped making sense and so lost her audience.  For instance, as she brazenly presented before audiences abroad the arrest, “trial” and “imprisonment” of the then “Governor-General” DSP Alamieyeseigha (of Bayelsa State) as solid evidence that the Obasanjo regime was conscientiously fighting corruption, I kept wondering whether she actually believed what her mouth was uttering. I also found some of her explanations for the continued deterioration of the economy under her “expert” watch at that time very laughable.

In fact, given the widespread reputation of the regime she served in for gross fiscal indiscipline (a regime that neither implemented budgets nor showed noticeable hint of distaste for official corruption) some people were certain that the World Bank would no longer touch her with a twenty foot pole. But those who held this view had grossly underestimated Okonjo-Iweala’s deep understanding of the dynamics of World/IMF politics. Before her tenure expired, she got President Obasanjo to sign away billions of dollars belonging to the Nigerian people (a windfall that had accrued to Nigeria at a time of sudden rise in crude oil prices) to the London and Paris Clubs of creditors as “Debt Relief,” to settle what is still regarded by many informed Nigerians as very questionable debts.

Her detractors had reasoned that with such a generous gesture extended to entrenched Western interests which the World Bank is a key custodian, no one ought to be surprised that the World Bank never bothered again to wonder how she was able to feel very comfortable as finance minister and head of the economic management team in a regime largely viewed as a revolting pond of corruption.  She was instead re-absorbed and given a higher responsibility.  

*Diezani Alison-Madueke,

Nigeria's Minister Of Petroleum Resources

My problem really was whether giving way that money was the best decision any patriotic finance minister and economic manager could have come up with at that time when a country like America was owing trillions of dollars and still holding its heads high? Talk of getting your priorities right, putting your money where your mouth is! Now, of what benefit was that very controversial transaction, done with indecent haste, and in utter disdain for the feelings of many Nigerians, to the long-suffering masses? Indeed, no country gets such a windfall every season, and so it amounted to insufferable prodigality to just throw it away like that.

Given the vast oil and gas resources available in the Niger Delta, the thinking in many informed quarters was that such an unexpected wealth that came to us at that time should have been deployed to establish petro-chemical and ancillary industries in the region to power not just the Nigerian economy but that of the entire West African region, to create more wealth, more jobs, abundant prosperity and some comfort for the majority.  But in the face Okonjo-Iweala’s desperation to give away the money (which then inspired serious speculations that she was motivated by some generous commissions coming to her for successfully negotiating the deal), and Obasanjo’s eagerness to always please Western institutions and powers, our position was gallantly defeated.

As the price of crude oil reached unprecedented heights and more billions of dollars poured into the country’s coffers, government assured us that since we had been freed from the “debt burden” that the generous earnings still accruing to us would be deployed to undertake infrastructural development. Now, my dear Madam Finance Minister, could you please show us the infrastructure financed with that “wind fall” so we can now believe you that the proceeds realized from the removal of the “oil subsidy” will not as well simply disappear into some dark holes?

Not A Laughing Matter!
Nigerian Cabinet Ministers Emerging From The Emergency
Federal Executive Council (FEC) Meeting Called During The
Nation-Wide Strike To Protest The Removal Of 'Fuel Subsidy'

Okonjo-Iweala was the major force behind the famous “Reforms” which almost became the second name of the Obasanjo regime. We all were witnesses to how the reforms created untold pain, devalued lives, enriched only a few, and added little or nothing to national development. All we heard was that the excruciating hardship inflicted by the “reforms” would be brief (as we have also been told in relation to the removal of the “oil subsidy”), after which a glorious period of abundance and comfort would follow.

 But until Obasanjo exhausted his eight years in power and unsuccessfully launched a Third Term Project to perpetuate himself in power, what Nigerians endured was only pain and more hardship, despite the fact that the economy was under the “expert” management of a World Bank economic guru. If there were attempts to diversify the economy and enlarge our sources of revenue by reviving, at least, one proven lucrative but neglected sector, namely, agriculture, which had ably sustained Nigeria’s pre-oil boom economy, such plans either died in the womb or failed woefully like all poorly thought-out policies and half-hearted efforts.

Our over-dependence on oil still remained our enduring nightmare, neither bringing us any nearer to the quality of life existing in other oil-producing nations nor drying up to force us out of our chronically lazy, rent-seeking economic system, so we could roll up our sleeves and really work hard to bring back the pleasant cocoa, palm, cotton and rubber plantations, raise again the groundnut pyramids, plant cassava and rice farms in very large quantities with modern implements and put in place reliable storage facilities. With these undertaken in sufficient quantities to serve our local and export needs, growth and development would easily be stimulated. Well, needless to remind us that at a time, even Obasanjo got tired of Okonjo-Iweala’s “expert” services and removed her as finance minister, and later as head of the Economic Team.  Some said she felt slighted. The rest, as they say, is history.


And now, Okonjo-Iweala is back. Although, she is yet to demonstrate that she is in possession of any new ideas, she is talking and walking with even greater confidence, gusto, and, in fact, messianic air, surprised, perhaps, and greatly buoyed by her delicious discovery that despite the dismal testimonial of her first coming, a Nigerian president could still have such confidence and unimaginable hope in her abilities.  And now she has reached into the World Bank Manual for developing countries and what Nigerians found in their hands on New Year Day was an old, familiar live-snake called “removal of subsidy on petrol” whose operational name is “fuel price hike”. 

Although Labour has called off the nation-wide strike embarked upon by an enraged populace to protest the very unpopular hike on the price of fuel from N65 to N141, after the Federal Government had “unilaterally” fixed the rate at N97 per litre, the issues thrown up by that very unfortunate action are still itching for attention. Indeed, no matter the real or imagined merits of the “fuel subsidy” removal, the Federal Government must be willing to admit that the timing of the removal is insensitive and irresponsible.  Why the indecent haste? Why not first conscientiously undertake the much more pressing task of halting the barbaric terminations of precious lives in some Northern states, which was causing untold grief, pain and fear in the land?

Did the president and his finance minister see the horrible pictures of the charred victims of the Christmas Day bombing? If they were touched like the rest of us, they would not have compounded the anxiety, trepidation and despair in the land by unleashing such a punitive policy a few days after that act of extreme savagery. By that singular action, this regime lost the chance of being regarded as compassionate and considerate. No matter how lofty our dreams for the nation might be, we must resist the temptation of appearing disdainful of the feelings of the people.



How Do All These Affect Them?

Now let’s briefly look at the issues involved, which have in no way been swept aside by the Federal Government’s N97 “concession,” which, we must admit is still very high. In 2009, Labour reportedly agreed with the Federal Government that the removal of the so-called subsidy on fuel can only be implemented after the existing refineries had been fixed and new are ones built and stable power supply achieved in the country. Why did government violate this agreement?

The issue of fixing the refineries to ensure sufficient local production of petroleum products makes a lot of sense. When that occurs, and fuel is refined locally, the cost of the Premium Motor Spirits (PMS) would be affordable to many and whatever government would chose to claim it is paying as subsidy can easily be examined, verified and tackled. The Guardian editorial of January 10, 2012 is very instructive. In it, the paper argued that since government has admitted that local refineries “are working at 38.2 per cent efficiency…,” according several oil experts, including a former Petroleum Minister, “the residual of the non-export crude would attract shipping and refining cost only. Therefore, on the basis of these factors alone, the cost of fuel per litre ought to be N34.03 and by implication, at N65 per litre, Nigerians were already subsidizing the government by N30.97.”   

It is not enough to announce that government “spent” N1.3 trillion on subsidy in just one year. We need to see the details of the expenses, and interestingly the House probe on the subsidy misadventure has opened a can of worms, and everyone is watching to see what would happen to those who had starred in the massive outrageous and insufferably reckless filthy business. If about N1.8 trillion was spent on this same subsidy between 2006 and 2008 – more than two years, how then can this regime justify the spending of N1.3 trillion under one year? It is left for government to prove that Nigerians are not merely subsidizing the corruption and inefficiency within its ranks. Government must always exist to serve the interest of the majority not that of a few privileged citizens.




Former President Olusegun Obasanjo

Indeed, it is difficult to believe that the very harsh effect of this fuel price hike on the citizenry was seriously considered before it was implemented. This is a country where social amenities are almost non-existent. People generate their own energy at home and business places and they depend on fuel to do so.  Even with the price of fuel fixed at N97 per litre, the cost of doing business in Nigeria will still go higher, and goods and services will rise above the reach of about 90% of Nigerians whom credible research efforts have already established as living below the poverty level.  Given the very dismal power supply in the country, and the over dependent on fuel it has created, there is no doubt that several more businesses may fold up, unable to cope any more under the very harsh economic climate in Nigeria; and many may trim down their staff strength (thereby, further compounding the already terrible unemployment problem), and companies that can afford it may relocate to more  business-friendly neighbours, like Ghana and others, where they would not need to run their businesses on generators 24 hours daily.

There is no basis for government’s wasteful campaign that without the “subsidy” money it would not be able to undertake capital projects. But like most people are already aware, this is less-than true. This government exports 2.4 million barrels of a crude oil a day. “At the current rate of $110 per barrel,” as observed by Femi Falana recently, “that will give you $2.6billion a day.” Now, when you multiply that by 365 days that make up a year, you will be shocked at the earnings coming into government coffers. Again, how much even will come to the Federal Government from the subsidy money since the fund will be shared between it, the states and local governments? About N400 billion if it got the N1.3 trillion it was asking for. So, without this, the Nigerian economy would collapse? If government were that poor, where then does its officials get the billions they squander daily before our very eyes?

Now, the strike is over, but fierce-looking soldiers are all over the place with tanks and fearful weapons as if the country is at war. One wished the unabated gruesome killings of innocent Nigerians in some states of the federation could attract even half of this kind of response.

And as for Mrs. Okonjo-Iweala, although she could not get her full pound of flesh this time, and may ask for more in the shortest possible time, the big loser in this whole matter is President Jonathan who has been misadvised into presenting a less-than edifying picture of himself to Nigerians, which may come to haunt him in the near future.  No reasonable ruler goes out of his way to court the kind of deep disaffection and very fierce, raging emotions one has seen Nigerians freely expressing these days just because he wishes to be seen as capable of taking tough decisions. And as Okonjo-Iweala’s friends congratulate her on her partial victory over long-suffering Nigerians, she ought to be told that she is yet to do anything to allay the growing fears that her second coming might be worse than her first. Indeed, it remains to be seen whether for her there will ever be a third coming, or even whether her second coming will run its full course.