Okonjo-Iweala braces for World Bank challenge

2012-03-31 10:51

Lagos – As a public office holder, the Harvard University-trained economist Dr Ngozi Okonjo-Iweala has scored many firsts.

She is Nigeria’s first female finance minister and she is also the country’s first female foreign affairs minister.

Now she is facing the ultimate test – to become the first African president of the World Bank.

“Am I confident? Absolutely,” the Nigerian finance minister said shortly after her South African counterpart, Pravin Gordhan, announced her candidature at a press conference in Pretoria.

Many in Nigeria were not surprised by her aspiration; they were surprised that the announcement came from her South African counterpart at a press conference in Pretoria just when South Africa and Nigeria were yet to recover from a diplomatic row that broke out after South Africa deported 125 Nigerians, alleging that their yellow fever vaccination cards were fakes.

Dr Sylvester Odion-Akhaine of the Lagos State University describes South Africa’s decision to be at the forefront of Okonjo-Iweala’s endorsement as “high-wire diplomacy, from which South Africa might be hoping to gain”.

The stake for South Africa is the chair of the Africa Union commission, which the country tried unsuccessfully to get in January.

No clear winner emerged during a contest for the post between incumbent Jean Ping of Gabon and Home Affairs Minister Nkosazana ­Dlamini-Zuma despite three rounds of voting.

Nigeria is believed to be one of the main countries opposed to South Africa. The vote has now been deferred until the next African Union summit in Malawi in July.

“When the next voting comes up again, Nigeria will have a moral obligation to reciprocate South Africa’s support for Okonjo-Iweala,” says ­Odion-Akhaine.

But he says South Africa may also have been backing Nigeria for the World Bank post out of “a desire to show solidarity with a fellow developing country’s demand for justice and democracy in the World Bank and the International Monetary Fund”.

Okonjo-Iweala’s decision to contest for the presidency of the World Bank is a direct challenge to the unwritten rule in the developed world, under which a European runs the International Monetary Fund while an American runs the World Bank.

“I really think that it is time that the international institutions were also thrown open to competition for all round the world to compete and for it to be done on merit,” she says.

Opeyemi Agbaje, a Lagos-based financial and business expert, says ­Okonjo-Iweala is facing an uphill task. “In an election year, I don’t think President Barrack Obama can afford to lose control of the World Bank.”

President Obama’s nominee for World Bank president is Korean-born American physician Jim Yong Kim.

Odion-Akhaine says South Africa’s support for Nigeria would not significantly enhance Nigeria’s chances. “The South African support is more of a moral statement that it is time for someone from a developing country to become the president of the bank,” he says.

Okonjo-Iweala, who also served in Nigeria’s previous governments as finance minister, is highly rated for her management of Nigeria’s economy. One of her most important achievements as finance minister was a deal she secured with the Paris Club of creditor nations in 2005 that saw the writing off of $30 billion (about R231 billion) of Nigeria’s debt.

Agbaje says the writing off of the debt made Nigeria’s financial sector credible with investors more willing to come to the country.
But not all Nigerians are satisfied with her management of the economy. Her most controversial reform was her support for the removal of fuel subsidies in order to free up funds for infrastructural development.

Yinka Odumakin of the Save Nigeria Group, the civil society group that led the fuel subsidy protests, says the subsidy removal was an economic policy that was meant to hurt the poor while the ruling class resumed its costly lifestyle. 

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