BLACK #STORIES:::: Nigeria is the largest destination for investment in Africa:::: Dr Okonjo Iweala.
BIO
Ngozi Okonjo-Iweala is a Nigerian-born
Harvard and MIT-educated former World Bank Managing Director who worked in
development. She recently returned to Nigeria as the new Minister of Finance.
Prior to her appointment as Managing Director of the World Bank, Dr.
Okonjo-Iweala also held the position of a Finance Minister and Foreign Minister
of Nigeria. She is notable for being the first woman to hold either of those
positions. Throughout her career, Dr. Okonjo-Iweala has worked to combat
corruption, make Nigeria's finances more transparent, and institute reforms to
make the nation's economy more hospitable to foreign investment.
Transcript of CME’s interview on France 24 on the
Growth of the Nigerian Economy.
Markus Karlsson:
Hello and welcome, I’m Markus Karlsson, Nigeria seems
to be on course to becoming Africa’s biggest economy with an average annual
growth rate of about 6 to 7% over the past decades, it looks set to take over
South Africa. Today, I’m speaking to the woman who is in charge of this rising
economic power. Ngozi Okonjo-Iweala is the finance Minister of Nigeria. She is
in Paris for the summit of African Leaders hosted by the French President. He
is also bringing together African and French business leaders.
Minister Iweala, thank you very much indeed for
speaking to us and welcome.
Dr. Ngozi Okonjo-Iweala:
Thank you Markus.
Markus Karlsson:
I spoke about an annual growth rate around about 6% in
the past decades or so. There are concerns that the Nigeria growth rate could
come down if there are adverse shock. What do you say about that risk?
Dr. Ngozi Okonjo-Iweala:
Well, it actually sits somewhere better than 6% in the
past decades edging towards seven. And yes, there are risks, it is a very
robust growth rate built on the back of good macro-economic management and
stability and emerging sources of growth in the non-oil sector. And of course,
there are risks and we are still quite dependent on oil for 70% of our
revenues. So should the oil price come down too much, we are vulnerable, but we
have made provisions to manage that, because we have an account that we try to
save the excess crude oil account that we try to save during the time of excess
crude oil prices. That helps us to cushion in times of shock. We are planning
that next year we’ve spent some of the money in that account 2013, but we will
be building it back up as a cushion.
Markus Karlsson:
There are some critics of the Nigerian economy, when I
spoke to the head of the Nigerian central bank just a few months ago and who,
for instance, spoke about a comatose industry and a bloated government. What do
you say of his criticism and that criticism, which still exist?
Dr. Ngozi Okonjo-Iweala:
I love my Central Bank Governor dearly and of course
he says some of these remarks. It is true that our recurrent expenditure is
very high and we will like it to go down. And it is almost 74 to 75% of total
cost. That’s too high. We agree with that and we have been working hard to
bring it on a downward trajectory. But recent awards of wage increases to
public servants in 2010 really bloated the budget. So, we are working, looking
for areas to streamline, make economies. We are also instituting something very
interesting which is a biometric method of paying our wages which is designed
to weed out what we call ghost workers from the work force. Sometimes there are
people inserted who are not really there. And we’ve been doing this exercise
over a year. To save considerable amount of over a 100 billion Naira and weed
out about 45,000 ghost workers. We want to finish that exercise that will help
us slim down our roles. We also need to streamline and merge some agencies. It
is not easy because they are underpinned by law and, you can see, politically
it’s quite charged.
Markus Karlsson:
You spoke about the oil sector before and still today,
Nigeria an export is still dependent on the oil sector, how do you counter
that? How do you diversify the economy? What’s your plan?
Dr. Ngozi Okonjo-Iweala:
You must have followed what’s happening recently, I
really want to counter the governor’s charge about comatose industry. This is
completely changing. The president of Nigeria, President Goodluck Ebele
Jonathan really lunched what we call a transformation agenda. What does that
mean? It means the true effort to diversify the country away from oil. The only
way we see to really solve the fundamental problems in Nigerian economy is to
diversify away from oil because we need to create jobs. Even though we are
growing better than 6% as you noted. And the IMF has projected 7.4% next year.
The point is we are not creating enough jobs. We need non-oil growth and what
is driving the economy right now is non-oil growth. Growth in the economy is
coming from Agriculture; it’s coming from Manufacturing. Manufacturing is no
longer comatose and it’s beginning to take off. We’ve got investment in
different sectors in petrochemicals. We just have a very big investment in by
“Indorama” of 1.2 billion in plastics and fertilizers. Nissan is looking at
investing in automobile industry. We have Dangote, a rich businessman who is
investing, not only in cement, but he’s also going into oil refineries and
others. We’ve got Procter and Gamble that just built a factory for 250 million
in the west of the country. So, we have real investment coming in, everybody is
looking into investing in the country. But Agriculture, as I said, the housing
sector is about to be kicked off, manufacturing is coming in and we’ve got
others, non-oil, minerals within the country that are really helping us as
sources of growth. And don’t forget, we have the creative industries and services.
Nigeria has the second largest movie Industry in the world after Bollywood. It
has created 200,000 direct jobs, a million indirect jobs, $250 million in value
and counting.
Markus Karlsson:
You mention a few companies that have invested in
Nigeria and who are investing in Nigeria. Do you think the western companies
have been too slow to catch on the growth that is taking place now in Nigeria?
And in elsewhere in Africa, for instance, because there has been so much focus
so much in Chinese investment in Africa in the past. Let’s say a decade.
Dr. Ngozi Okonjo-Iweala:
Well, let me say this when you look at what is
happening in Africa, I think there are two interesting phenomenon that you
really need to look at. One is that most of our investments now are
South-South. It’s coming from China, India, Brazil and other African countries.
South Africa is a major investor in Nigeria, for instance. And this is a
phenomenon that is happening all over the continent. In developing countries as
a whole, South-South investment is big. There is one other piece of interesting
information and that is Africa-to-Africa investment is increasing. Nigeria is
investing in so many other African countries. Our banks are in fifteen
countries, our cementing plants being built by Dangote in more than twelve to
thirteen countries. So we are also investing in each other. Now what I see is,
of course North-South or South-North investment is very important. We value it,
but the point is that there may be a little bit slow. I say to investors from
the North, they really have to work quite hard now in order to be able to catch
their opportunities.
Markus Karlsson:
Do you think Western companies; European companies for
instance are taking the African market for granted?
Dr. Ngozi Okonjo-Iweala:
I will be presumptuous for me to say that, I don’t
know if they are taking it for granted. But I do know that if they don’t
scramble for the opportunities that are emerging now they will be left behind.
Markus Karlsson:
And who is going to take over if they are indeed left
behind?
Dr. Ngozi Okonjo-Iweala:
Countries from the south. I mean countries from the
south. We have countries coming in everyday. Indonesians making investment,
it’s not just the BRICs but also the non-BRIC countries are coming in to make
investment. And our own domestic investors are also seizing the opportunities,
which is really what you want to see. First and foremost, investors need to see
your own domestic investor, putting in money in the country and that’s
happening big time in Nigeria. You know we’ve got a company called Innoson
manufacturing cars now. Almost more than 50% of the part built in Nigeria,
that’s amazing to me.
Markus Karlsson:
Let me just ask you about the business climate in
Nigeria. You use to work for the World Bank. The World Bank comes out with its
annual doing business report. In that business report Nigeria is in spot 147
out of 189 countries. Doesn’t that scare off potential investors?
Dr. Ngozi Okonjo-Iweala:
Not really, I think if you look at many of the BRICs,
their positions are not that great. Some of them are in 100, while some are in
88. They are not at the top. That doesn’t mean that we don’t need to do better,
of course we would like to do better. But we need to look at those particular
areas on how we are being scored and focus on them. It is true that we have a
lot of bureaucratic hurdles. I’m not saying we are in the position we want to
be. We have pledged to work very hard, I think point by point. I think what we
are doing now is that we have a competition council that have been set up.
Minister of trade and investment is taking this on and we are going to take
this point one by one. We are seeing that it is not really scaring off
investors. Nigeria is the largest destination for investment in Africa.
Markus Karlsson:
So do you think investors are looking at the growth
rate than other factors, so to speak.
Dr. Ngozi Okonjo-Iweala:
Yes, they probably are. But that does not make us
complacent, I think the question we ask ourselves is, “Yes, we are the largest
destination for investment” maybe we could get more if we solve some of those
problems. I’m not here to say that we feel very glad. We are not where we want
to be and we have to work very hard as a country. We are not complacent at all
and let me say this, growth is not everything. You know we are growing, but we
are not creating enough jobs. And we have young people coming into the market,
so we worry every time about whether the type of growth, we have is the type we
need to have. That’s why we are happy that the non-oil sector; this attempt
that the president is pushing to diversify is beginning to work now. This past
12 months we created about 1.6 million jobs. We need about 2 million, so we are
not there yet.
Markus
Karlsson:
We are going to wrap it up there Ngozi
Okonjo-Iweala; it’s been a pleasure to speak to you. Thank you very much indeed
for being here. With that we are going to wrap up this edition of Business
Interview.
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