A cabinet reshuffle that saw the architect of Nigeria's economic reforms unexpectedly moved from finance to foreign affairs has raised fears about the future financial management of Africa's most populous country.
President Olusegun Obasanjo has given no explanation for why he gave a new portfolio on Wednesday to Ngozi Okonjo-Iweala, a star economist head-hunted from the World Bank in 2003 to turn around the collapsed economy of Africa's top oil producer.
The timing of the change, less than a year before elections that will see Obasanjo step down, has perplexed analysts. They say Okonjo-Iweala needed more time to consolidate her reforms, which have yet to be felt by Nigeria's 140 million people, most of whom live on less than $1 a day.
"In the absence of a clear explanation, Nigeria's partners and the markets are going to need a fair bit of reassurance that the reform programme and economic management are still in safe hands," said Antony Goldman, an independent risk analyst.
Obasanjo said Okonjo-Iweala would continue to head the economic team and he promoted her deputy Nenadi Usman to replace her. Usman has worked closely with Okonjo-Iweala since 2003.
"Nenadi will be a useful, though potentially costly, preliminary test for the upcoming change in administration to see how deep these reforms have gone," said Jacqueline Madu of Emerging Markets Economics Research at Credit Suisse in London.
"I do worry that Nenadi won't have the extreme guts it takes to stand up to Obasanjo, the National Assembly and her employees in the ministry. While Ngozi herself may not necessarily need to remain, her spirit certainly does and time will tell if Nenadi has it," she added.
Okonjo-Iweala, a straight-talking technocrat, faced fierce resistance as she tried to introduce greater accountability in a country that is ranked sixth most corrupt in the world by watchdog Transparency International. There was intense speculation in Nigeria on Obasanjo's motive for shifting her to foreign affairs.
Theories published in the media included: she is being groomed for political office; she has displeased the president by revealing too much about government finances; she is being removed so that state coffers can be looted behind her back.
Under Okonjo-Iweala's management, Nigeria has saved up more than $30 billion in foreign reserves thanks to high oil prices that have boosted the value of its crude exports. This is in sharp contrast to past governments which squandered or stole billions of petrodollars.
Her reforms persuaded rich creditor nations to strike a groundbreaking debt relief deal with Nigeria under which it used windfall savings from high oil prices to pay back $12 billion in debts in exchange for the cancellation of a further $18 billion.
But economists say there is still a long way to go. Nigerians have seen little improvement in their erratic supplies of electricity and water, almost non-existent health services, dilapidated schools and potholed roads.
Crucially, economists say the government has to come up with measures that will create jobs for millions of desperately poor unemployed people. Otherwise, the reforms will have no popular support and future governments will be able to reverse them. A Fiscal Responsibility Bill that is designed to enshrine the reforms into law has been dragging through the National Assembly for months with no end in sight.
Comments
Comments are closed.