Nigeria: Open for Business

As a precursor to the sorts of African thinkers we’ll be seeing in Arusha at the TED Global conference, we’re honored to hear from former Nigerian finance minister Ngozi Okonjo-Iweala. She developed a fantastic reputation for change in Nigeria, stepping down as a vice-president of the World Bank to take on the toughest ministry in sub-Saharan Africa’s largest nation.

She tells us about “a different Africa”, not the Africa we hear about all the time: poverty, hiv, malaria, conflict, disaster. “It’s true that these thigns are going on, but there’s also an Africa you don’t hear about very much, an Africa that’s growing and reforming itself.

She tells the story of the governor of Bayelsa State, Diepreye Alamieyeseigha, who was arrested in London for receiving transfers of $8 million sent out of Nigeria into his bank accounts. His arrest was possible through the cooperation of London and Nigerian authorities, specifically the Economic and Financial crimes commission. He skipped bail in London and came back to Nigeria, dressed as a woman, to take advantage of his judicial immunity. But the people of Bayelsa impeached him, allowing him to be arrested. She sees this as an example of people and governments deciding to fight the corruption that has plagued the continent.

She points towards a clear upward trend in governance in 28 African nations. And she makes it clear that corruption isn’t solely an African problem – who’s receiving the $20-40 billion taken from the continent and hidden in Northern bank accounts? Who’s recieving those stolen goods? She points towards a World Bank initiative to fund development through asset recovery, not just from conventional aid. While there’s gratitude for aid, there’s also frustration with dependency on aid, Okonjo-Iweala tells us.

Pointing to the opportunity for economic growth aside from development aid, and the inefficiency of government bureacracy, she talks about telecoms in Nigeria. Under a state monopoly, the company provided only 4,500 land lines for the nation. Once Obasanjo privatized the sector, it rapidly expanded to 32 million mobile phone lines, making enormous amounts of money in the process. MTN, a South African telecoms firm, made $360 million a year in profit… in a country where the per capita GDP is less than $500!

One of the major innovations Okonjo-Iweala made in Nigeria was reforming the budget process. Nigeria is hugely oil-dependent, and much of government revenue comes from oil sales. To slow the volatility of commodity prices, the government began budgeting at a price below the actual oil price, creating a savings of $27 billion before she left office, now $40 billion after the fact. Other major macroeconomic reforms brough inflation down from 30% to 11%. Banks were forced to consolidate, strenghtening their asset base to $100 million, which has increased outside investment, including from Barclays, which has put $500m into Nigerian banks.

She points us towards the wonderful Africa Open for Business documentary, featuring entrepreneurs across the continent. She points to the opportunity for supporting remarkable women entrepreneurs, like a children’s clothing business that builds clothes from African cloth as well as more conventional materials, and is now accepting orders from Walmart.

“We have to help Africa transform by creating jobs.” That means we don’t have to concentrate on making drugs cheaper – “We allow people to buy the antimalaria drugs themselves,” because they’ve got high-paying jobs.