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| Esther Nenadi Usman has taken full control of Nigeria’s finance ministry. Can she maintain relations with Paul Wolfowitz and the World Bank? |
DISRUPTION AND WARFARE in the Middle East continue to push up oil prices, but oil producers’ association Opec has protested that it wants lower oil prices. Nigeria is an Opec member but it draws 75% of its GNP and 95% of its exports earnings from oil, so it would be a cavalier finance minister that did not want to get the maximum revenue from its prime asset.
Not that oil and gas prices are all that are troubling officials at Nigeria’s finance ministry at the moment. They are probably more concerned with internal politicking. The first event to rock the ministry came in June, when former World Bank vice-president Ngozi Okonjo-Iweala was moved from her role as finance minister to become foreign minister. It was she who secured a Paris Club debt deal in October 2005 that included the cancellation of $30 billion of Nigeria’s debt, Africa’s biggest-ever debt forgiveness.
Okonjo-Iweala won many admirers in the international financial community for her straight-talking, pragmatism and charm, and indeed won Euromoney’s finance minister of the year in 2005. However, she was less popular among some politicians at home, who regarded her as a meddling busybody who obstructed their desire to share out Nigeria’s oil wealth among themselves. Foreign investors were momentarily reassured that she remained chairman of the economic team and still had responsibility for international economic relations. Her deputy, Esther Nenadi Usman, has become finance minister, but the message was that she would follow Okonjo-Iweala’s lead and that her former boss’s move to the foreign ministry was all part of a larger economic expansion drive.
In an interview with Euromoney at the end of July, Okonjo-Iweala was keen to stress that it was business as usual, and she was still in charge. “This has been a team effort,” she said. “We have done very well on fiscal policy. Now we need to inject more economic thinking into foreign policy.”
Okonjo-Iweala wears a watch with five different time faces – she can check the time in the US, Nigeria, South Africa, Jamaica and China – so it should surprise nobody that she shows acute attention to detail and knows what is going on in the rest of the world. She had only been in the foreign ministry for four weeks when Euromoney spoke to her but the place had changed out of all recognition. It had been repainted, the dreary red carpet was replaced, and the lift was working.
Then a week later, at the end of July, while in London visiting bankers, the second, decisive blow was struck. Okonjo-Iweala was informed that her role as chairman of the economic committee had been given to Nenadi Usman. She reportedly remarked: “Why did they not allow me to come back to Nigeria before this humiliation?”
When she returned to Nigeria’s capital, Abuja, she went straight to Aso Rock, president Olusegun Obasanjo’s residence, and offered her resignation as foreign minister. It was accepted, and a statement issued that she had “a compelling need to take care of pressing family issues”.
There is much speculation as to the reasons for the row with Obasanjo. First, her switch from finance ministry to foreign ministry was a surprise. A spin doctor might say that her move to the foreign ministry was so she could carry out similar reforms there, while overseeing operations at the finance ministry. In fact, this is what she told Euromoney at the end of July, the week before her resignation. A more cynical view would be that the switch of portfolios was a sideways move – that she had to be moved out of finance because an election is looming and funds need to be made available for some pork barrel politicking. Everybody knows that Okonjo-Iweala would not allow reserves to be wasted. But somebody without her resolve would be likely to be more compliant.
It is understood that the new finance minister was unhappy about playing second fiddle to Okonjo-Iweala. According to reports in local media, she complained to the president that, with the 2006 annual meetings of the IMF and the World Bank in Singapore looming, she had not yet been contacted by the meetings secretariat.
In addition, both the IMF and World Bank might still be thinking that the finance ministry remained under Okonjo-Iweala’s control and thus they would want to be dealing directly with her and not with Nenadi Usman.
According to Nigerian press reports, Okonjo-Iweala had already felt that the economic management team had lost the ear of Obasanjo before she was switched to the foreign ministry.
In her letter of resignation, she said: “I am particularly proud of the fiscal aspects of this programme that brought sanity and prudent management to our fiscal regime and above all greater transparency so that all Nigerians can hold government more accountable whether for revenues collected in the Federation Account or for the costs of running government or other financial responsibilities.”
When contacted by Euromoney a few days after her resignation, Okonjo-Iweala confirmed that she had decided to leave government when she was relieved of her position as chairman of the economic committee. However, she stressed that she continued to support the reform programme. “The country has turned a corner and will not go back,” she said. She has been inundated with job offers from around the world, with opportunities both international, regional and domestic. “The first thing I am going to do is take a month’s holiday with my family,” she said. “It will be the first chance I have had to do so for 24 years. Then I shall weigh up the options and decide. You can also support reforms from outside government as well as inside.”
What happens next?
According to Sruti Patel, head of research at London-based investment bank Afrinvest, whatever happened does not seem to be business as usual. “To the outside world it appears to be a politically motivated decision, and unless there is clarification about the reasons behind Dr Ngozi’s resignation, this will continue to be the way it is viewed,” she says. “Dr Ngozi was extremely well respected in the international community. The problem is how investors will take her departure. At the moment it seems to be business as usual – we haven’t seen interest in Nigeria wane on the back of this.”