Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo

 

Unsupported browser: Your browser does not meet modern web standards. See how it scores »

{ action.text }

 Ngozi Okonjo-Iweala


As she rings in the new year with her family in suburban Maryland, Ngozi Okonjo-Iweala’s cell phone doesn’t stop buzzing. Nigeria’s top finance official is waiting for a call from former U.K. prime minister Gordon Brown, who has called her “a brilliant reformer,” and a visit from the International Monetary Fund’s assistant director of fiscal affairs, Menachem Katz, who worked with her in 2005 when she led the team that set out to clear Nigeria’s $30 billion debt. She’s just gotten word that her first book, Reforming the Unreformable: Lessons from Nigeria, has gone into its second printing, three months after MIT Press released it. In two days she will be back at work seeking to ferret out embezzlers, reduce government waste, and get the economy on track in her homeland, where the World Bank says more than one third of businesses considered bribing government officials commonplace in 2011.

In 2003, Okonjo-Iweala was vice president and corporate secretary at the World Bank when Nigeria’s then president, Olusegun Obasanjo, asked her to write an economic brief. When he had taken office four years earlier, as she writes in her book, “the nation was riddled with corruption, bloated with debt, battered by economic volatility … Poverty was rampant, and inequality was deep.” Her analysis so impressed him that he asked her to become the country’s finance minister, the first time a woman would hold the post. The summons startled her. She had a successful career as an economist in the States, where she lived with her surgeon husband and a child still in high school. (Their three older children were already in college or grad school.) She also had a deep and complicated connection to Nigeria.

Born in 1954, when Nigeria was under British rule, Okonjo-Iweala was barely a teenager during the civil war of 1967 to 1970, when part of the country attempted to secede as the Republic of Biafra. Her father—still an Obi, or traditional Igbo king—served as brigadier in the Biafran army. Okonjo-Iweala also knew the effects of poverty and illness firsthand, having once carried her malaria-stricken sister three miles on her back to see the doctor. So when President Obasanjo asked her to serve her country, she wanted to help, though she was reluctant to leave her family in the States. “I was persuaded this was a once-in-a-lifetime opportunity,” she told the Guardian in 2005. “I felt Nigeria didn’t have to succumb to the image of being a corrupt country; we didn’t have to let the economy stagnate.”


Nigeria is the largest oil producer in Africa, but its fuel resources have been a mixed blessing. An oil economy is inherently volatile, and officials spent wildly during boom times, paying little attention to basic economic needs when prices crashed. When Okonjo-Iweala signed on as finance minister, the country owed $30 billion to a consortium of international creditors known as the Paris Club, largely because of the excesses of nearly four decades of predominantly military dictatorships. As she writes, “Nigeria lacked a clear and consistent budget process.”

In 2004, as Okonjo-Iweala began tackling the debt, she purchased a watch that the saleswoman called the “ugliest thing she had ever seen”—one with five faces set to time zones in Nigeria, Japan, Europe, and the United States. She would be lost without it. “People always want to know why I got this watch,” she says. “I had to talk to the most powerful leaders of the G8 countries.”

Those talks paid off.

In 2005, she brokered a deal with the Paris Club for the cancellation of $18 billion in debt, largely in exchange for implementing IMF-approved reforms. The following year, Nigeria made good on the remaining debt with a payment of $12 billion. Okonjo-Iweala says this was her most important act as finance minister in the Obasanjo administration. Once the debt was cleared, she invited Fitch and Standard & Poor’s to rate Nigeria’s creditworthiness for the first time: it received a rating of BB-. That’s three levels below investment grade, but “no one ever thought that developing countries should be rated,” she says. In that sense, she saw it as progress.

Under Obasanjo, Okonjo-Iweala spoke out so vociferously against corruption that she earned the nickname “Okonjo the Troublemaker.” She was proud of the notoriety. “If I was regarded as trouble to the establishment because of my desire to clean up our public finances and work for a better life for Nigerians, then so be it,” she wrote in her book.

On first glance, Reforming the Unreformable reads like a free-market text: advance macroeconomic reforms; promote privatization, deregulation, and liberalization. But Okonjo-Iweala believes in the redistribution of wealth, especially when it comes to the oil industry. Nigeria’s refineries have historically been so mismanaged that much of the country’s own oil can’t be used domestically until it has been exported and refined outside the country. The government then offers oil marketers subsidies so the oil can be sold at affordable rates—a policy the government wants to end because the subsidies have enriched unscrupulous middlemen who sometimes sell the same oil twice or don’t deliver at all. Okonjo-Iweala would rather redirect that money to programs that support health care, employment opportunities, and infrastructure—things that will benefit poor people who don’t need cheap gas because they don’t own cars.

In her three years as finance minister, Okonjo-Iweala and her team stabilized Nigeria’s economy with budget cuts, eliminating perks like homes, cars, and drivers for civil servants. She sacked government employees and sold government properties and vehicles, including her own (though she later purchased a car and rehired her chauffeur at her own expense). She simplified taxes and tariffs. As she began to phase out the oil subsidies, she had the names of the corrupt oil marketers published in the newspapers. She also instituted an 18-month bank reform. By its end, in 2005, the number of banks had decreased from 89 to 25, yet the capital they represented had increased from $15 million to $192 million.

Less successful was her effort to overhaul the Nigerian customs agency, which was known for smuggling and inefficiency. She couldn’t halt the practice of waiving duties on imported rice and other products whose profits benefit wealthy businessmen and politicians. She wanted to bring in an outside firm to assess the situation and suggest reforms to weed out smuggling. But she was blocked by the president’s cabinet.

In 2006, Obasanjo made her head of the foreign ministry, but she didn’t think she could “deliver on any important reform agenda” in that role. “I felt if I can’t get on with more reforms and respect the principles, then I should just leave,” she says.

Okonjo-Iweala returned to the World Bank. Reunited with her family, she attended to ordinary domestic chores rather than the needs of an entire country. But in 2011 the newly elected president of Nigeria, Goodluck Jonathan, started calling to bring her back into the ministerial fold. “He said the finances of the country were moving in the wrong direction, and he thought that I could be the person to reverse the trend,” she says.

So in August 2011 she returned to her old post with new vigor and a new title—Coordinating Minister for the Economy and Minister of Finance. “Everyone calls me CME for short. I don’t know what they call me behind my back,” she says. “I seem to waltz through this with a pretty thick skin. You have to have that if you are going to manage the finances properly.”

Her fortitude was tested in December 2012, when her mother, Kamene Okonjo, 82, was kidnapped in her hometown, Ogwashi-Uku. The kidnappers said they were challenging Okonjo-Iweala because she blocked payments to oil marketers. The media reported that her mother was eventually released, but Okonjo-Iweala says she escaped. She was found wandering near a highway, weak after being held in the forest for five days with little food or water.

“The abduction has strengthened my resolve. It has exactly the opposite effect on me than what the kidnappers wanted,” she says. And she isn’t intimidated: “I don’t feel scared in my country. It’s my country. And no one is going to make me too scared to work in it or live in it.”

0 comments about this story. Start the discussion »

Credit: Robert Landry

Reprints and Permissions | Send feedback to the editor

From the Archives

Close

Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me