THIS week, a new Finance minister will take over the nation’s Finance ministry.

She is Ngozi Okonjo-Iweala, who is assuming duties in the ministry for the second time, having been a former Finance minister under former President Olusegun Obasanjo.

She is credited with the actualisation of Nigeria’s debt cancellation during the Obasanjo regime.

In her second coming, she has already set out a road map. According to reports, she has vowed to tighten fiscal policy amid falling oil prices and turbulent global financial markets.

Prices for oil, which accounts for 80 per cent of fiscal revenue, have slumped 14 per cent in New York since July 26, reaching as low as $75.71 a barrel on August 9. At the same time, economic growth in the U.S., which sources a fifth of its crude imports from Nigeria, is slowing.

“We need to tighten fiscal policy,” Okonjo-Iweala said in a telephone interview from Washington on August 12, her last day as a managing director of the World Bank. “We need to get on a better fiscal path.”

Parliament on May 25 approved an amended budget for 2011 that raised President Goodluck Jonathan’s spending estimates by 17 per cent to N4.5 trillion ($29 billion).

“She’s going to have a lot of challenges as oil prices fall,” said Sebastian Spio-Garbrah, managing director of New York-based DaMina Advisors LLP, a frontier-market risk adviser, said in a telephone interview. “The government won’t be able to make the investments they want without the money.”

Okonjo-Iweala, 57, was Finance minister between 2003 and 2006, spearheading talks that led the Paris Club group of creditors to write off $18 billion in debt. She resigned from the cabinet in August 2006 after then-President Olusegun Obasanjo moved her to the Foreign ministry post and dropped her as head of his economic team.

“Fiscal policy has been extremely loose over the last two years and it’s just not a sustainable path,” Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd., said in a phone interview. “This has to be addressed.”

The naira has dropped 1.3 per cent against the dollar this year and was trading at 153.95 last week in Lagos.

Jonathan asked Okonjo-Iweala to return to government after winning the presidential vote, expanding her mandate to include the coordination of economic policy. Her priority will be to find ways to meet Jonathan’s goals of increasing investment in power plants, roads and agriculture to help diversify the economy and create jobs, she said.

Jonathan’s People’s Democratic Party won 205 of the 364 seats in the National Assembly in this year’s election, cutting its majority to 56 percent from 74 percent in 2007.

“She will be operating in a more constrained political environment than before,” Spio-Garbrah said.

Nigeria is Africa’s biggest oil producer. The Federal Government’s domestic debt rose to N5.21 trillion at the end of June, from N4.87 trillion as of March, according to statements on the website of the Abuja-based Debt Management Office. Nigeria has an overall debt-to-GDP ratio of around 23 per cent, according to Razia Khan, the London-based head of African economic Research at Standard Chartered Bank Ltd. The euro zone’s average debt as a percentage of GDP was 85.1 per cent by the end of 2010, according to Eurostat.

Her predecessor in office, Olusegun Olutoyin Aganga (born 1955) was appointed Finance Minister from April 6, 2010 to June 2011. But his achievements within the relatively short period was highly commendable, going by analysts’ assessment.

Aganga was born in Sabongida Ora in Owan West Local Government Area of Edo State in 1955. He was educated at the University of Ibadan, Nigeria where he obtained a B.Sc Degree in Biological Sciences in 1977 and the University of Oxford, United Kingdom where he obtained a degree in Theology in 2000. Aganga qualified as a Chartered Accountant in 1983.

Aganga previously worked in Arthur Young in Nigeria, Ernst & Young in London UK, and Goldman Sachs International in London, where he was managing director in hedge funds. Aganga was also a Board member of the Nigerian Security and Exchange Commission Technical Committee on Nigerian Capital Market Structure and a former chairman of the Association for Financial Markets in Europe (AFME) Prime Brokerage Committee. Aganga currently serves on a number of boards and committees including Technoserve and The Prince’s Trust Invest in Futures Committee.

In 2006, Aganga was a co-founder of the Nigerian Leadership Initiative.

Aganga is credited for the establishment of the Sovereign Wealth Fund (SWF) in Nigeria.

In July 2011, Aganga was redeployed or moved aside by the President to the new Ministry of Trade and Investment, to make way for Ngozi Okonjo-Iweala to return as the Nigerian Minister of Finance.

Interestingly, the creation of the Ministry of Trade and Investment seems to be paying off for the country already, as local and international investors gear up for multi-million dollar investments in Nigeria.

When Aganga was appointed to drive the new initiative, the Organised Private Sector saw the appointment as strategic, especially considering the fact that his wealth of experience in investment and real sector matters, which he displayed even as the Minister of Finance, was more needed in the industry than anywhere else.

The President, Manufacturers Association of Nigeria, Chief Kola Jamodu, said at a recent courtesy visit to the minister that the industry was indeed happy that Aganga had been posted to conclude the good works he started as the country’s Finance minister, even though he wished that the Ministry of Trade and Investment could have been expanded to accommodate the name “industry”.

The crowd of the movers and shakers of the Nigerian business community at the maiden interaction between the ministry and the local business community in Lagos two weeks ago was the first sign that the country is about to witness a remarkable change in real sector activities.

The Group Chief Executive Officer, Dangote Group, Alhaji Aliko Dangote, Chairman Ikeja Hotels, Mr. Goodie Ibru; Chairman, Nigerian Bottling Company Plc, Segun Akpata; Chairman, HoneyWell Group, Oba Otudeko, among other notable industrialists pledged investments running into trillions of naira in critical projects that will change the living standards of Nigerians within four years.

Various banks, including First Bank of Nigeria Plc, Stanbic IBTC Bank Plc, United Bank for Africa Plc and Zenith Bank Plc, among other strong banks, have also indicated interest in key investments that will help to drive the transformation agenda of President Goodluck Jonathan.

Notwithstanding the usual perception of policy inconsistency in the country and the poor infrastructure snag in investment matters, foreign investors have also continued to show keen interest in investment opportunities in Nigeria. ‘Deep pocket’ investors from the United States, United Kingdom, Australia, China and other countries have visited the Trade and Investment ministry to seek for investment opportunities that can be explored for mutual benefits.

Experts have said that Aganga’s Goldman Sachs background was a key factor that has raised the confidence of the international community in the Nigerian economy.

With Aganga driving real sector growth and the momentum gathered in preparation for job and wealth creation, the job of the new Minister of Finance, Dr. Ngozi Okonjo-Iweala, another star cabinet member of Jonathan’s administration, may be much easier.

Notwithstanding the misconception about the two key appointments in some quarters, a frontline industrialist, who asked not to be named, because he could not comment publicly on the matter, said Okonjo-Iweala and Aganga were friends coming from the Diaspora with the same passion about their country, Nigeria, adding that, with their belief in each other’s abilities, the Nigerian economy would be the better for it.

“From what I know about the two key ministers’ capabilities as well as the good relationship they have, going for them, I think this is the time to really expect a turnaround of the Nigerian economy,” the industrialist, spoke with journalists recently in Lagos.

To meet the target set for unlocking capital and growing the real sector of the Nigerian economy, the Trade and Investment minister began his job with a three-day retreat with the directors and chief executive officers of the ministry.

The retreat was targeted at making the staff of the ministry key into the new drive with a view to changing their orientation in preparation for the hard work ahead. Aganga noted at the retreat that the whole idea of the transformation agenda was to create economic growth in the country and ensure the creation of jobs, stressing that the ministry would focus on the implementation of mandatory skills transfer to Nigeria by foreign construction companies as well as develop industrial clusters for the real sector.

The Bank of Industry, Department of Trade in the ministry and the other parastatals and agencies under the ministry have also mapped out clear plans to create additional three million jobs in the next three years as the first step towards the eradication of poverty in Nigeria.

This was one of the highpoints of the communiqué issued at the end of a three-day retreat  of the ministry in Abuja.

According to a statement from the ministry, as part of the strategies towards achieving this, the different departments and parastatals will develop a comprehensive backward integration programme aimed at improving innovation and productivity for rice, sugar, wheat, yam, potatoes, starch and palm produce, among others.

The statement said the ministry would establish model industrial clusters in each geo-political zone across the country.

It said, “In line with the mandate to lead the nation’s investment, job creation and economic growth, aggressive investment drive, the ministry must be refocused and repositioned in order to effectively serve as the flag and hub of industrial revolution that will help Nigeria take its rightful place in global affairs.

In this regard, departments, agencies and parastatals under the ministry have pledged to create not less than 3,100,850 new jobs within the next three years.

-Guardian

Posted by admin on Aug 17 2011. Filed under NNP Spotlight. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry