Friday, August 19, 2011
Tithing in filth
Gone are the days in Nigeria when being a pastor, prophet or Imam is not the first choice of profession for anyone not the least the young ones. Doing the 'work' of God was not so attractive to many people in the same manner that being a professional politician had no attraction.
The job of a priest was a humble one. The priest was supposed to be a moral exemplar. So, the crave or even lust for money and material objects was not a priority for him.
The perception of the politician is different in the eyes of the people. The politician was viewed as a liar and a morally dishonest person. He was the direct opposite of the priest.
But times have changed. Whether for a priest or politician, what matters is financial reward. These days, many university graduates in the country pound the streets for non-existent jobs. Many never-do-well have turned to politics as a way of surviving the harsh economic reality. Many more have suddenly received 'revelations' to become God's representatives on earth. In paid programs on the TV, Radio and inside public commercial buses, pastors and prophets are 'reaching' out to the people.
MONEY IS THE ROOT OF ALL EVIL
The message tag is simple. God's people are not supposed to live in poverty. Financial prosperity is not a sin even though the holy book may have said that "money is the root of all evil". Special prayers are even organized for church members and non-member friends of the church.
The feedback too for these 'men and women' of God has been substantial. It comes in the form of tithes. For the priest, tithes are an indicator of his job performance. If the tithes brought by members are huge, it shows the pastor is doing a yeoman's job. In this case, it would not matter where the money for the tithes is coming from. The pastor does not care a hoot about the source of tithes brought by members.
On the contrary, if members are scrounging to pay their tithes, it is a profound statement on the (in)effectiveness of the priest. He needs to stoke the 'fire' of prayer for his members so they can bring 'juicer yeild' next time.
The pronouncement made by the anti-corruption agency in the country, the Economic and Financial Crime Commission (EFCC) that religious leaders should show more concern about the sources of huge tithes received from members of their congregation, if the war against corruption is to succeed in the country may not cut any ice afterall.
This is simply because in the church, tithes are 'economic indicators' that determine whether a pastor is doing a good job or not.
Chair of the anti-graft agency, Mrs. Farida Waziri told her audience recently at a one-day interactive seminar on economic and financial crimes for state senior executives in Calabar, Cross River State that it become the practice for corrupt government officials and dubious members of the public to pay huge sums as tithes to religious bodies without being asked the source of the wealth.
She wants religious leaders to find out if the huge funds paid by members as tithes were legitimately earned.
FILTHY LUCRE
What is 'filthy lucre' to the EFCC is 'blessing of God' to religious leaders in the country. And this relative perception is where the problem lies.
"Prosperity must come legitimately. I feel a responsible pastor should know where the tithe of his worshiper is coming from. How and where did you make the money that you are bringing in as tithe? It is not enough for your member to bring in a huge amount and you say- God bless you", Mrs. Farida wanted to tell religious leaders.
"Pastors should be responsible through their members (who are top government officials, members of the public) to want to know how they make money they bring to church. So, it goes beyond just preaching prosperity, they should let the people know that religion is beyond that. For any soul to prosper it means that soul must be in right standing with the principles that God has laid down by doing the dos and refusing the don’ts", she added.
The agency's head of legal unit in Enugu, Mr. Johnson Ojogbani, disclosed that over N300b ( $195m) recovered had been returned to either the agencies they were stolen from or the coffers of the Federal Government.
Corruption is a bane of the country's growth and development. In both government and public spheres, illegitimate money changes hands.
Religious leaders and the anti-corruption body need to have the same perspective on what constitutues 'illegitimate wealth' if the country is to be sanitized.
Friday, August 12, 2011
Amnesty International alleges unlawful killings in Nigeria
Human Rights watchdog, Amnesty International has said Nigerian soldiers in the Joint Task Force (JTF) sent to Borno State, North-East Nigeria have been responsible for at last 23 deaths and for burning a market.
A woman was shot dead on Wednesday in clashes between soldiers and suspected members of Boko Haram in the northern town of Biu in the state and a church was set on fire.
According to newspaper reports she was holding her young child at the time she was shot and killed.
Authorities in Nigeria have upped military presence in the north-east as the government tries to force an end to the Islamist group Boko Haram's armed uprising.
Boko Haram - which roughly translates as "Western education is forbidden" - has carried out a wave of killings and bombings in Nigeria in their attempt to overthrow the government and create an Islamic state.
Sources say Nigeria army's conduct has alienated the local community. Many residents of Maiduguri, the Borno State capital are now said to be more scared of the army than they are of Boko Haram.
Last month, Borno state Governor Kashim Shettima admitted that the army had been guilty of excesses in Maiduguri.
Timeline of Boko Haram's Terror
2002: Founded
2009: Hundreds killed when Maiduguri police stations stormed
2009: Boko Haram leader Mohammed Yusuf captured by army, handed to police, later found dead
Sept: 2010: Freed hundreds of prisoners from Maiduguri jail
December 2010: Bombed Jos, killing 80 people and blamed for New Year's Eve attack on Abuja barracks
2010-2011: Dozens killed in Maiduguri shootings
May 2011: Bombed several states after president's inauguration
June 2011: Police HQ bombed
June 2011: 25 people killed in attack on bar
July 2011: Motorbikes banned in Maiduguri to prevent drive-by shootings
July 2011: Thousands of residents flee Maiduguri after a series of attacks
Thursday, August 4, 2011
End Stage Renal Disease (ESRD) is more serious in Nigeria than HIV/AIDS"
"End Stage Renal Disease (ESRD) is more serious in Nigeria than HIV/AIDs"
End Stage Renal Disease (ESRD) is more serious in Nigeria than HIV/AIDS. There is hardly any family in Nigeria that has not felt the trauma of the ailment or outright death by ESRD. Whereas ESRD is like HIV/AIDS, an impossible, if not terminal condition, proper diagnosis is still poor and treatment is very expensive and futile for the poor who usually cannot afford the cost of kidney transplantation. For instance, Lagos University Teaching Hospital (LUTH) has said that to treat ESRD, it will take a "moderate rate" of not more than N2 million!
There is hardly any major hospital in Nigeria today that does not have ESRD patients pining away, perhaps wishing for death.
From The Nation, Nigerian Independent daily
End Stage Renal Disease (ESRD) is more serious in Nigeria than HIV/AIDS. There is hardly any family in Nigeria that has not felt the trauma of the ailment or outright death by ESRD. Whereas ESRD is like HIV/AIDS, an impossible, if not terminal condition, proper diagnosis is still poor and treatment is very expensive and futile for the poor who usually cannot afford the cost of kidney transplantation. For instance, Lagos University Teaching Hospital (LUTH) has said that to treat ESRD, it will take a "moderate rate" of not more than N2 million!
There is hardly any major hospital in Nigeria today that does not have ESRD patients pining away, perhaps wishing for death.
From The Nation, Nigerian Independent daily
Ogoniland oil spills: Shell admits Nigeria liability
Ogoniland oil spills: Shell admits Nigeria liability
Oil giant Shell has accepted responsibility for two devastating oil spills in Nigeria's Ogoniland region.
The Bodo fishing community sued Shell in the UK, alleging that spills in 2008 and 2009 had destroyed the environment and ruined their livelihoods.
Their lawyer said they would seek hundreds of millions of dollars in compensation for one of the world's "most devastating oil spills".
Shell told the BBC it would settle the case under Nigerian law.
Experts who studied video footage of the spills say they could be as large as the 1989 Exxon Valdez disaster in Alaska, when 10m gallons of oil destroyed the remote coastline, the UK's Guardian newspaper reports.
Until now, Shell has claimed that less than 40,000 gallons were spilt in Nigeria, it reports.
'Severe poverty'
Correspondents say the spillage was caused by pipelines which ran through the village.
Shell stopped pumping oil from Ogoniland in 1993 after the writer Ken Saro-Wiwa - who was later hanged - led a campaign against it for allegedly destroying the environment.
Marine life has been devastated within the 2,000 hectares of the creek and the mangroves have been, without exception, destroyed”
Martin Day
Lawyer for claimants
Martyn Day, representing the 69,000-strong community, said they would demand "adequate compensation immediately".
"This is one of the most devastating oil spills the world has ever seen and yet it had gone almost unnoticed until we received instructions to bring about a claim against Shell in this country [UK]," he said.
He said the community had three sets of claims.
The first claim - for at least $100m (£61m) - was to clean up the area.
The second one was for damages to the community land and the final one was for losses suffered by individual families, Mr Day said.
"The Bodo people are a fishing community surrounded by water. What was the source of their livelihood now cannot sustain even the smallest of fish. The spills have caused severe poverty amongst the community.
"Marine life has been devastated within the 2,000 hectares of the creek and the mangroves have been, without exception, destroyed," Mr Day said.
Shell said it accepted the spills were caused by equipment failure and not by sabotage or theft, which it said caused most of the spills in the oil-producing Niger Delta region.
It said it would pay compensation in accordance with Nigerian law but warned it "could take several months to reach a conclusion".
Mr Day said the settlement could set a precedent for other communities in the Niger Delta to seek compensation in British courts.
Communities have repeatedly claimed that international oil firms fail to respect their rights and contaminate their land with oil spills, though the companies dispute this.
From the BBC
Oil giant Shell has accepted responsibility for two devastating oil spills in Nigeria's Ogoniland region.
The Bodo fishing community sued Shell in the UK, alleging that spills in 2008 and 2009 had destroyed the environment and ruined their livelihoods.
Their lawyer said they would seek hundreds of millions of dollars in compensation for one of the world's "most devastating oil spills".
Shell told the BBC it would settle the case under Nigerian law.
Experts who studied video footage of the spills say they could be as large as the 1989 Exxon Valdez disaster in Alaska, when 10m gallons of oil destroyed the remote coastline, the UK's Guardian newspaper reports.
Until now, Shell has claimed that less than 40,000 gallons were spilt in Nigeria, it reports.
'Severe poverty'
Correspondents say the spillage was caused by pipelines which ran through the village.
Shell stopped pumping oil from Ogoniland in 1993 after the writer Ken Saro-Wiwa - who was later hanged - led a campaign against it for allegedly destroying the environment.
Marine life has been devastated within the 2,000 hectares of the creek and the mangroves have been, without exception, destroyed”
Martin Day
Lawyer for claimants
Martyn Day, representing the 69,000-strong community, said they would demand "adequate compensation immediately".
"This is one of the most devastating oil spills the world has ever seen and yet it had gone almost unnoticed until we received instructions to bring about a claim against Shell in this country [UK]," he said.
He said the community had three sets of claims.
The first claim - for at least $100m (£61m) - was to clean up the area.
The second one was for damages to the community land and the final one was for losses suffered by individual families, Mr Day said.
"The Bodo people are a fishing community surrounded by water. What was the source of their livelihood now cannot sustain even the smallest of fish. The spills have caused severe poverty amongst the community.
"Marine life has been devastated within the 2,000 hectares of the creek and the mangroves have been, without exception, destroyed," Mr Day said.
Shell said it accepted the spills were caused by equipment failure and not by sabotage or theft, which it said caused most of the spills in the oil-producing Niger Delta region.
It said it would pay compensation in accordance with Nigerian law but warned it "could take several months to reach a conclusion".
Mr Day said the settlement could set a precedent for other communities in the Niger Delta to seek compensation in British courts.
Communities have repeatedly claimed that international oil firms fail to respect their rights and contaminate their land with oil spills, though the companies dispute this.
From the BBC
Nigeria Ogoniland oil clean-up 'could take 30 years'
Nigeria Ogoniland oil clean-up 'could take 30 years'
Nigeria's Ogoniland region could take 30 years to fully recover from the damage caused by years of oil spills, a United Nations report says.
The long-awaited study says complete restoration could entail the world's "most wide-ranging and long-term oil clean-up".
Communities faced a severe health risk, with some families drinking water with high levels of carcinogens, it said.
On Wednesday, oil giant Shell accepted liability for spills in 2008 and 2009.
The Bodo fishing community has said it will seek hundreds of millions of dollars in compensation.
Nigeria is one of the world's major oil producers.
'900 times recommended levels'
The assessment of Ogoniland, which lies in the Niger delta, said 50 years of oil operations in the region had "penetrated further and deeper than many had supposed".
Continue reading the main story
Analysis
Peter Okwoche
BBC News
During a visit to a village in Ogoniland in 2007, I went to a small stream that gave people water for all their daily needs. The effects of oil spillage were clear. On the surface of the water there was a thin film of oil. Villages moved it with their hands before scooping water.
Villagers told me no fish had been seen in the stream for more than five years. They told me people had been killed by oil pipes exploding and others had developed health problems after inhaling fumes from burning oil well heads.
When I visited the village again in 2011, oil spillage had worsened. Villagers no longer drank water from the stream. They walked for up to four hours to get water.
Over the past two decades, successive Nigerian governments have failed the people of Ogoniland. I doubt this report will change anything. In the meantime, the voices of secession in Ogoniland will grow louder.
"In at least 10 Ogoni communities where drinking water is contaminated with high levels of hydrocarbons, public health is seriously threatened," the UN Environmental Programme (Unep) said in a statement.
Some areas which appeared unaffected were actually "severely contaminated" underground, Unep said.
In one community, the report says, families were drinking from wells which were contaminated with benzene, a known carcinogen, at 900 times recommended levels.
It said scientists at the site, which lay close to a Nigerian National Petroleum Company pipeline, found oil slicks eight centimetres thick floating on the water.
This was reportedly due to an oil spill more than six years ago, it said.
The report, based on examinations of some 200 locations over 14 months, said Shell had created public health and safety issues by failing to apply its own procedures in the control and maintenance of oilfield infrastructure.
But it also said local people were sabotaging pipelines in order to steal oil.
The report says that restoring the region could cost $1bn (£613bn) and take 25-30 years to complete.
"The environmental restoration of Ogoniland could prove to be the world's most wide-ranging and long term oil clean-up exercise ever undertaken if contaminated drinking water, land, creeks and important ecosystems such as mangroves are to be brought back to full, productive health," Unep said.
'Not attributing blame'
The report, which is regarded as the most detailed study on any area in the oil-rich Niger Delta, was in part paid for by Shell after a request by the Nigerian government.
Continue reading the main story
Oil in Ogoniland: Troubled History
1958: Oil struck in Ogoniland
1990: Movement for the Survival of the Ogoni People (Mosop) formed, led by Ken Saro-Wiwa
1993: 300,000 Ogonis protest at neglect by government and Shell
1993: Shell pulls out of Ogoniland after employee is beaten
1994: Four community leaders killed by mob of youths. Mosop leaders, including Ken Saro-Wiwa, arrested
1995: Mr Saro-Wiwa and eight others tried and executed; widespread condemnation of government
2003-2008: International attention switches to armed conflict started by other communities in Niger Delta
2011: Shell accepts liability for two Ogoniland spills
Amnesty International, which has campaigned on the issue, said the report proved Shell was responsible for the pollution.
"This report proves Shell has had a terrible impact in Nigeria, but has got away with denying it for decades, falsely claiming they work to best international standards," said Audrey Gaughran, Amnesty's global issues director, said.
But earlier, Unep spokesman Nick Nuttal told the BBC's Network Africa that the study was not intended to "blame any particular stakeholder operating in Ogoniland".
"What we are indeed really seriously hoping is that this might actually close the chapter in what has often been a sad, tense and sometimes violent story, going back several decades.
"We are hoping that this might build some sense of co-operation between all the various players in this part of the world."
He also stressed that Shell's admission of liability for two spills had nothing to do with the Unep report.
Shell said on Wednesday that it took responsibility for the spills, which took place in 2008 and 2009, and would settle the case under Nigerian law. The Bodo fishing community had alleged that the leaks had ruined their environment and livelihoods.
Ogoni communities have long complained about the damage to their communities, but they say they have mostly been ignored.
The issue was highlighted by the writer Ken Saro-Wiwa, who was executed in 1995 by Nigeria's military government, sparking international condemnation.
The campaign forced Shell to stop pumping oil out of Ogoniland but it continues to operate pipelines in the region and spillages have continued.
From the BBC
Nigeria's Ogoniland region could take 30 years to fully recover from the damage caused by years of oil spills, a United Nations report says.
The long-awaited study says complete restoration could entail the world's "most wide-ranging and long-term oil clean-up".
Communities faced a severe health risk, with some families drinking water with high levels of carcinogens, it said.
On Wednesday, oil giant Shell accepted liability for spills in 2008 and 2009.
The Bodo fishing community has said it will seek hundreds of millions of dollars in compensation.
Nigeria is one of the world's major oil producers.
'900 times recommended levels'
The assessment of Ogoniland, which lies in the Niger delta, said 50 years of oil operations in the region had "penetrated further and deeper than many had supposed".
Continue reading the main story
Analysis
Peter Okwoche
BBC News
During a visit to a village in Ogoniland in 2007, I went to a small stream that gave people water for all their daily needs. The effects of oil spillage were clear. On the surface of the water there was a thin film of oil. Villages moved it with their hands before scooping water.
Villagers told me no fish had been seen in the stream for more than five years. They told me people had been killed by oil pipes exploding and others had developed health problems after inhaling fumes from burning oil well heads.
When I visited the village again in 2011, oil spillage had worsened. Villagers no longer drank water from the stream. They walked for up to four hours to get water.
Over the past two decades, successive Nigerian governments have failed the people of Ogoniland. I doubt this report will change anything. In the meantime, the voices of secession in Ogoniland will grow louder.
"In at least 10 Ogoni communities where drinking water is contaminated with high levels of hydrocarbons, public health is seriously threatened," the UN Environmental Programme (Unep) said in a statement.
Some areas which appeared unaffected were actually "severely contaminated" underground, Unep said.
In one community, the report says, families were drinking from wells which were contaminated with benzene, a known carcinogen, at 900 times recommended levels.
It said scientists at the site, which lay close to a Nigerian National Petroleum Company pipeline, found oil slicks eight centimetres thick floating on the water.
This was reportedly due to an oil spill more than six years ago, it said.
The report, based on examinations of some 200 locations over 14 months, said Shell had created public health and safety issues by failing to apply its own procedures in the control and maintenance of oilfield infrastructure.
But it also said local people were sabotaging pipelines in order to steal oil.
The report says that restoring the region could cost $1bn (£613bn) and take 25-30 years to complete.
"The environmental restoration of Ogoniland could prove to be the world's most wide-ranging and long term oil clean-up exercise ever undertaken if contaminated drinking water, land, creeks and important ecosystems such as mangroves are to be brought back to full, productive health," Unep said.
'Not attributing blame'
The report, which is regarded as the most detailed study on any area in the oil-rich Niger Delta, was in part paid for by Shell after a request by the Nigerian government.
Continue reading the main story
Oil in Ogoniland: Troubled History
1958: Oil struck in Ogoniland
1990: Movement for the Survival of the Ogoni People (Mosop) formed, led by Ken Saro-Wiwa
1993: 300,000 Ogonis protest at neglect by government and Shell
1993: Shell pulls out of Ogoniland after employee is beaten
1994: Four community leaders killed by mob of youths. Mosop leaders, including Ken Saro-Wiwa, arrested
1995: Mr Saro-Wiwa and eight others tried and executed; widespread condemnation of government
2003-2008: International attention switches to armed conflict started by other communities in Niger Delta
2011: Shell accepts liability for two Ogoniland spills
Amnesty International, which has campaigned on the issue, said the report proved Shell was responsible for the pollution.
"This report proves Shell has had a terrible impact in Nigeria, but has got away with denying it for decades, falsely claiming they work to best international standards," said Audrey Gaughran, Amnesty's global issues director, said.
But earlier, Unep spokesman Nick Nuttal told the BBC's Network Africa that the study was not intended to "blame any particular stakeholder operating in Ogoniland".
"What we are indeed really seriously hoping is that this might actually close the chapter in what has often been a sad, tense and sometimes violent story, going back several decades.
"We are hoping that this might build some sense of co-operation between all the various players in this part of the world."
He also stressed that Shell's admission of liability for two spills had nothing to do with the Unep report.
Shell said on Wednesday that it took responsibility for the spills, which took place in 2008 and 2009, and would settle the case under Nigerian law. The Bodo fishing community had alleged that the leaks had ruined their environment and livelihoods.
Ogoni communities have long complained about the damage to their communities, but they say they have mostly been ignored.
The issue was highlighted by the writer Ken Saro-Wiwa, who was executed in 1995 by Nigeria's military government, sparking international condemnation.
The campaign forced Shell to stop pumping oil out of Ogoniland but it continues to operate pipelines in the region and spillages have continued.
From the BBC
Thursday, July 21, 2011
Ngozi’s second coming
Ngozi’s second coming
By Dapo Fafowora
Dr. Ngozi Okonjo- Iweala, a Managing Director at the World Bank, will return to Nigeria in August as the new Minister of Finance. It will be her second coming as Finance Minister. She was first appointed Minister of Finance in 2004 by ex-President Obasanjo after the resignation, on grounds of ill heath, of Adamu Ciroma. But she did not complete her term as Finance Minister. She was, instead, redeployed to the Foreign Ministry, a post that she was not familiar with and did not like. No reason was given at the time, or since, for her sudden transfer to the Foreign Ministry. It could have been due to irreconcilable differences between her and ex-President Obasanjo over economic and financial policy.
When she first arrived in the Finance Ministry in 2004, or thereabouts, the economic outlook was uncertain. Increased oil revenues had led to some recovery from the serious balance of payments difficulties that drove Nigeria to seek assistance in the 1980s from both the World Bank and the IMF. Nigeria had returned to fiscal and balance of payments equilibrium. It was beginning to pay its foreign bills. But the large foreign debt still constituted an albatross on the economy. Economic recovery was painfully slow, averaging only four per cent. Continuity in the structural adjustment policy was necessary to return public finances to full fiscal balance, essential for any meaningful and sustainable growth. Dr. Okonjo-Iweala achieved some success in this regard.
She had many critics as Finance Minister. Many thought she was too wedded in her reforms to the World Bank/IMF model. But it would be fair to acknowledge that she brought some stability to Nigeria’s public finance at the time. This is why she is being brought back into government by President Jonathan. Under her, public spending was brought under greater control. There was a massive realignment of recurrent and capital expenditure in favour of the latter. She also introduced a clear cut strategy and greater discipline on public spending, including well defined budgetary priorities and targets. Reforms in the public sector, which were intended to reduce cost of governance, led to massive and painful layoffs. The public service was cut down to size, but due to wasteful public spending the cost of governance continued to rise.
This financial orthodoxy pursued relentlessly by Mrs. Okonjo-Iweala was part of the World Bank’s financial agenda and strategy for poor countries. She applied the classic WB/IMF prescriptions mercilessly. Under her watch, international confidence in the Nigerian economy began to return gradually. Foreign investment in the economy increased significantly. The western economies, our creditors and major trading partners, were happy with the restructuring of the domestic economy and Okonjo-Iweala’s handling of it. It was what they had hoped for when she was appointed Finance Minister and she did not disappoint them. Of course, her financial and economic reforms were made easier by the surge in the oil income. This allowed the economy to regain fiscal balance and return to the path of modest growth that averaged about four per cent.
Our Western creditors were even happier when Okonjo- Iweala began tackling Nigeria’s debt problem. Through negotiations, Nigeria agreed to pay $12 billion, instead of the $18 billion which it was claimed she owed. This was considered a remarkable feat as, on the surface, Nigeria got its creditors to write off the balance of $6 billion. Ngozi was considered a financial wizard for pulling off the feat. Soon after, she returned to her job in Washington, having fallen out with ex-President Obasanjo. The debts are piling up again.
But since then, some doubts have been publicly expressed by many regarding the financial prudence of seeking to pay off our foreign debt in one fell swoop. To start with, it is argued that we may not have actually owed all of the $18 billion we were alleged to have owed our foreign debtors. Some of the alleged debts were phony. They could not really be verified. True, a foreign auditing firm was employed to verify the debts. But this firm relied mainly on debt records produced by our creditors. Local records were either incomplete or unreliable. Since we were anxious to finally resolve the debt issue, Nigeria readily accepted the report of the foreign firm regarding our total debts and agreed to pay $12 billion, with the balance of allegedly $6 billion written off.
It is questionable whether we should have agreed to pay off as much as $12 billion. Nigeria’s total GNP at the time was $4 billion per annum. So, what was paid our creditors represented three years of our total GNP. It was totally unprecedented in the history of the international financial system. This huge debt repayment left a huge gap in our investment funds and increased our financing gap. It accounts for the rapid decline in our infrastructure today. As far as is known, no other indebted country has been subjected to such a harsh treatment by its creditors. Certainly, not Brazil or Argentina, both of which owed far more than Nigeria. Contrast the way Nigeria was treated by its creditors with the way Greece, Ireland, and Spain are now being treated with kid gloves. The EU and the IMF are falling over themselves in offering financial bail outs on favourable terms to those countries to prevent them defaulting. Nigeria was never in any real danger of defaulting and owed far less than those countries.
Of course, there has since then been a change of policy and strategy in the World Bank’s approach to debt issues, particularly where poor countries are concerned. When I had lunch with her in Washington in January, 2009, in the company of Chief Emeka Anyaoku, Mrs. Okonjo-Iweala acknowledged that a comprehensive review of the debt issue had taken place in the World Bank and that poor countries could now expect to be treated less harshly. Since then, some African countries have obtained debt relief on more favourable terms than Nigeria.
When she returns as Finance Minister in August, she will find that Nigeria’s economic and financial conditions have changed. The challenges she will face this time will be vastly different from those she had to face in 2003. Deficit financing, most of it misdirected, has increased, undermining growth. Inflationary pressures are building up. But the medium-long term financial outlook appears better with the Nigerian economy projected to grow at about seven per cent from five per cent. At over $30 billion, the foreign reserves look healthy. With the political crisis in the Maghreb and Middle East, the surge in Nigeria’s oil revenue is likely to be maintained. But the economy remains very fragile. Foreign investment has reduced to a trickle. Many commercial banks are in danger of total collapse. Due to high production costs and falling demand, the manufacturing sector is in a steady decline. The small and medium scale enterprises, crucial for industrial growth, are also facing hard times due largely to difficulties in accessing bank loans for expansion and poor energy supply. Unemployment is rising at all levels. Job losses are rampart.
The biggest challenges Mrs. Ngozi-Okonjo-Iweala will face include those of re-introducing fiscal discipline in public finances, cutting the cost of government by reviewing the bloated public sector wages, particularly the jumbo pay of the legislators, realigning public spending in favour of capital rather than recurrent expenditure and introducing policy instruments that will curtail the fraud and corruption in public expenditure. She will be given a free hand to tackle these underlying but grave financial and economic challenges. But the President must set her clear targets. She will, of course, encounter stiff opposition from vested interests. Already, members of the House of Representatives have given notice that they will resist any cut in their pay. Her task is by no means easy. But she must remain undaunted and move speedily to meet these challenges headlong.
Culled from The Nation
By Dapo Fafowora
Dr. Ngozi Okonjo- Iweala, a Managing Director at the World Bank, will return to Nigeria in August as the new Minister of Finance. It will be her second coming as Finance Minister. She was first appointed Minister of Finance in 2004 by ex-President Obasanjo after the resignation, on grounds of ill heath, of Adamu Ciroma. But she did not complete her term as Finance Minister. She was, instead, redeployed to the Foreign Ministry, a post that she was not familiar with and did not like. No reason was given at the time, or since, for her sudden transfer to the Foreign Ministry. It could have been due to irreconcilable differences between her and ex-President Obasanjo over economic and financial policy.
When she first arrived in the Finance Ministry in 2004, or thereabouts, the economic outlook was uncertain. Increased oil revenues had led to some recovery from the serious balance of payments difficulties that drove Nigeria to seek assistance in the 1980s from both the World Bank and the IMF. Nigeria had returned to fiscal and balance of payments equilibrium. It was beginning to pay its foreign bills. But the large foreign debt still constituted an albatross on the economy. Economic recovery was painfully slow, averaging only four per cent. Continuity in the structural adjustment policy was necessary to return public finances to full fiscal balance, essential for any meaningful and sustainable growth. Dr. Okonjo-Iweala achieved some success in this regard.
She had many critics as Finance Minister. Many thought she was too wedded in her reforms to the World Bank/IMF model. But it would be fair to acknowledge that she brought some stability to Nigeria’s public finance at the time. This is why she is being brought back into government by President Jonathan. Under her, public spending was brought under greater control. There was a massive realignment of recurrent and capital expenditure in favour of the latter. She also introduced a clear cut strategy and greater discipline on public spending, including well defined budgetary priorities and targets. Reforms in the public sector, which were intended to reduce cost of governance, led to massive and painful layoffs. The public service was cut down to size, but due to wasteful public spending the cost of governance continued to rise.
This financial orthodoxy pursued relentlessly by Mrs. Okonjo-Iweala was part of the World Bank’s financial agenda and strategy for poor countries. She applied the classic WB/IMF prescriptions mercilessly. Under her watch, international confidence in the Nigerian economy began to return gradually. Foreign investment in the economy increased significantly. The western economies, our creditors and major trading partners, were happy with the restructuring of the domestic economy and Okonjo-Iweala’s handling of it. It was what they had hoped for when she was appointed Finance Minister and she did not disappoint them. Of course, her financial and economic reforms were made easier by the surge in the oil income. This allowed the economy to regain fiscal balance and return to the path of modest growth that averaged about four per cent.
Our Western creditors were even happier when Okonjo- Iweala began tackling Nigeria’s debt problem. Through negotiations, Nigeria agreed to pay $12 billion, instead of the $18 billion which it was claimed she owed. This was considered a remarkable feat as, on the surface, Nigeria got its creditors to write off the balance of $6 billion. Ngozi was considered a financial wizard for pulling off the feat. Soon after, she returned to her job in Washington, having fallen out with ex-President Obasanjo. The debts are piling up again.
But since then, some doubts have been publicly expressed by many regarding the financial prudence of seeking to pay off our foreign debt in one fell swoop. To start with, it is argued that we may not have actually owed all of the $18 billion we were alleged to have owed our foreign debtors. Some of the alleged debts were phony. They could not really be verified. True, a foreign auditing firm was employed to verify the debts. But this firm relied mainly on debt records produced by our creditors. Local records were either incomplete or unreliable. Since we were anxious to finally resolve the debt issue, Nigeria readily accepted the report of the foreign firm regarding our total debts and agreed to pay $12 billion, with the balance of allegedly $6 billion written off.
It is questionable whether we should have agreed to pay off as much as $12 billion. Nigeria’s total GNP at the time was $4 billion per annum. So, what was paid our creditors represented three years of our total GNP. It was totally unprecedented in the history of the international financial system. This huge debt repayment left a huge gap in our investment funds and increased our financing gap. It accounts for the rapid decline in our infrastructure today. As far as is known, no other indebted country has been subjected to such a harsh treatment by its creditors. Certainly, not Brazil or Argentina, both of which owed far more than Nigeria. Contrast the way Nigeria was treated by its creditors with the way Greece, Ireland, and Spain are now being treated with kid gloves. The EU and the IMF are falling over themselves in offering financial bail outs on favourable terms to those countries to prevent them defaulting. Nigeria was never in any real danger of defaulting and owed far less than those countries.
Of course, there has since then been a change of policy and strategy in the World Bank’s approach to debt issues, particularly where poor countries are concerned. When I had lunch with her in Washington in January, 2009, in the company of Chief Emeka Anyaoku, Mrs. Okonjo-Iweala acknowledged that a comprehensive review of the debt issue had taken place in the World Bank and that poor countries could now expect to be treated less harshly. Since then, some African countries have obtained debt relief on more favourable terms than Nigeria.
When she returns as Finance Minister in August, she will find that Nigeria’s economic and financial conditions have changed. The challenges she will face this time will be vastly different from those she had to face in 2003. Deficit financing, most of it misdirected, has increased, undermining growth. Inflationary pressures are building up. But the medium-long term financial outlook appears better with the Nigerian economy projected to grow at about seven per cent from five per cent. At over $30 billion, the foreign reserves look healthy. With the political crisis in the Maghreb and Middle East, the surge in Nigeria’s oil revenue is likely to be maintained. But the economy remains very fragile. Foreign investment has reduced to a trickle. Many commercial banks are in danger of total collapse. Due to high production costs and falling demand, the manufacturing sector is in a steady decline. The small and medium scale enterprises, crucial for industrial growth, are also facing hard times due largely to difficulties in accessing bank loans for expansion and poor energy supply. Unemployment is rising at all levels. Job losses are rampart.
The biggest challenges Mrs. Ngozi-Okonjo-Iweala will face include those of re-introducing fiscal discipline in public finances, cutting the cost of government by reviewing the bloated public sector wages, particularly the jumbo pay of the legislators, realigning public spending in favour of capital rather than recurrent expenditure and introducing policy instruments that will curtail the fraud and corruption in public expenditure. She will be given a free hand to tackle these underlying but grave financial and economic challenges. But the President must set her clear targets. She will, of course, encounter stiff opposition from vested interests. Already, members of the House of Representatives have given notice that they will resist any cut in their pay. Her task is by no means easy. But she must remain undaunted and move speedily to meet these challenges headlong.
Culled from The Nation
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