06 March 2014, Abuja – Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said the country appears to be suffering from resource curse, whereby a tiny elite benefits from the oil wealth, whereas the mass of people languish in abject poverty.
The finance minister, who said this in an interview posted on the website of the Council on Foreign Relations, Washington DC, noted that although since 2004, the Gross Domestic Product (GDP) had tripled, largely due to oil revenue, the lifestyle perception of poverty had actually gone up because of rising inequality.
Okonjo-Iweala said: “The pace of growth should be faster. We should not be content with growing at an average of seven per cent.
“In order to make appreciable inroads out of poverty, like China did, we actually have to perform like China and grow at nine to 10 per cent a year. Because everybody else is growing at one per cent and some are contracting, seven per cent looks pretty good. But with the poverty problems we have, we actually have to grow faster.”
The minister insisted that the quality of growth in the country must also change.
“Our Gini coefficient has been going in the wrong direction. We don’t need the bulk of the growth being captured by a smaller segment of the population. We have to correct that by precisely pursuing growth in sectors that create jobs. That’s why agriculture is enormous,” she added.
She however stressed the need for the diversification of the economy.
“Nigeria has always talked about diversification, but we actually have to deliver it, and that is what this administration is doing. We’ve completely revamped the agricultural sector. Young people are now all trying to be involved,” she said.
“There’s a programme called Nagropreneurs — not a very pretty name — for young agricultural entrepreneurs, who are being supported. We are almost the largest rice importer in the world, and we mean to be self-sufficient by 2015,” she added.
Speaking on the development in the housing sector, Okonjo-Iweala pointed out that the recently launched Mortgage Refinance Company of Nigeria (MRC) would unleash growth on the sector.
“We have only 50,000 mortgages in this country of 170 million. Everybody tries to save over their lifetime to buy a house. There are no affordable mortgage rates. That’s not acceptable,” she said.
The finance minister disclosed that Nigeria being the largest recipient of Foreign Direct Investment (FDI) in the continent has continued to attract a lot of companies.
She disclosed that Procter & Gamble invested $250 million in baby products in the South-western part of the country, adding that the company would be investing additional $50 million.
Also, she said Indorama invested $1.2 billion in fertiliser and petrochemicals plants, while the Dangote Group is putting $9 billion into a series of refineries and petrochemical plants.
“We privatised the power sector, and investment has come in — over $2 billion — to purchase our power plants. Power is the single largest constraint on investment.
“A survey done by the World Bank shows that power and access to financing — it’s not even corruption, that’s a little bit lower down — are the top two constraints that businesses cite. Government has not been able to manage the power sector. And to diversify the economy, we must have power,” she declared.
Speaking on the obstacles she encountered when she was a minister under former President Olusegun Obasanjo’s administration, she identified “vested interests” as a major obstacle.
“It was really fierce in the ports. With customs, we didn’t succeed. In every single sector, people who were benefiting from the way that it was were very resistant to the way we wanted it to be. It remains a problem today,” she maintained.
According to her, she resigned as a minister then because “at some point, with some of the reforms we were trying to do, I felt that I was no longer able to stick to my principles,” adding that “the thing political atmosphere was just like now.”
She explained further: “It was heating up. When it comes to election time, everybody wants all sorts of things. The sensible thing to do was to resign.”
The minister however called for a social contract where everybody agrees that certain things have to be done.
– Obinna Chima, This Day