NIGERIA RISES: Economy has Grown by Around 6% Annually For Decades

Transcript of CME’s interview on France 24 on the Growth of the Nigerian Economy

Markus Karlsson: Hello and welcome, I’m Markus Karlsson, Nigeria seems to be on course to becoming Africa’s biggest economy with an average annual growth rate of about 6 to 7% over the past decades, it looks set to take over South Africa. Today, I’m speaking to the woman who is in charge of this rising economic power. Ngozi Okonjo-Iweala is the finance Minister of Nigeria. She is in Paris for the summit of African Leaders hosted by the French President. He is also bringing together African and French business leaders.

Minister Iweala, thank you very much indeed for speaking to us and welcome.

Dr. Ngozi Okonjo-Iweala: Thank you Markus.

Markus Karlsson: I spoke about an annual growth rate around about 6% in the past decades or so. There are concerns that the Nigeria growth rate could come down if there are adverse shock. What do you say about that risk?

Dr. Ngozi Okonjo-Iweala: Well, it actually sits somewhere better than 6% in the past decades edging towards seven. And yes, there are risks, it is a very robust growth rate built on the back of good macro-economic management and stability and emerging sources of growth in the non-oil sector. And of course, there are risks and we are still quite dependent on oil for 70% of our revenues. So should the oil price come down too much, we are vulnerable, but we have made provisions to manage that, because we have an account that we try to save the excess crude oil account that we try to save during the time of excess crude oil prices. That helps us to cushion in times of shock. We are planning that next year we’ve spent some of the money in that account 2013, but we will be building it back up as a cushion.

Markus Karlsson: there are some critics of the Nigerian economy, when I spoke to the head of the Nigerian central bank just a few months ago and who, for instance, spoke about a comatose industry and a bloated government. What do you say of his criticism and that criticism, which still exist?

Dr. Ngozi Okonjo-Iweala: I love my Central Bank Governor dearly and of course he says some of these remarks. It is true that our recurrent expenditure is very high and we will like it to go down. And it is almost 74 to 75% of total cost. That’s too high. We agree with that and we have been working hard to bring it on a downward trajectory. But recent awards of wage increases to public servants in 2010 really bloated the budget. So, we are working, looking for areas to streamline, make economies. We are also instituting something very interesting which is a biometric method of paying our wages which is designed to weed out what we call ghost workers from the work force. Sometimes there are people inserted who are not really there. And we’ve been doing this exercise over a year. To save considerable amount of over a 100 billion Naira and weed out about 45,000 ghost workers. We want to finish that exercise that will help us slim down our roles. We also need to streamline and merge some agencies. It is not easy because they are underpinned by law and, you can see, politically it’s quite charged.

Markus Karlsson: You spoke about the oil sector before and still today, Nigeria an export is still dependent on the oil sector, how do you counter that? How do you diversify the economy? What’s your plan?

Dr. Ngozi Okonjo-Iweala: You must have followed what’s happening recently, I really want to counter the governor’s charge about comatose industry. This is completely changing. The president of Nigeria, President Goodluck Ebele Jonathan really lunched what we call a transformation agenda. What does that mean? It means the true effort to diversify the country away from oil. The only way we see to really solve the fundamental problems in Nigerian economy is to diversify away from oil because we need to create jobs. Even though we are growing better than 6% as you noted. And the IMF has projected 7.4% next year. The point is we are not creating enough jobs. We need non-oil growth and what is driving the economy right now is non-oil growth. Growth in the economy is coming from Agriculture; it’s coming from Manufacturing. Manufacturing is no longer comatose and it’s beginning to take off. We’ve got investment in different sectors in petrochemicals. We just have a very big investment in by “Indorama” of 1.2 billion in plastics and fertilizers. Nissan is looking at investing in automobile industry. We have Dangote, a rich businessman who is investing, not only in cement, but he’s also going into oil refineries and others. We’ve got Procter and Gamble that just built a factory for 250 million in the west of the country. So, we have real investment coming in, everybody is looking into investing in the country. But Agriculture, as I said, the housing sector is about to be kicked off, manufacturing is coming in and we’ve got others, non-oil, minerals within the country that are really helping us as sources of growth. And don’t forget, we have the creative industries and services. Nigeria has the second largest movie Industry in the world after Bollywood. It has created 200,000 direct jobs, a million indirect jobs, $250 million in value and counting.

Markus Karlsson: You mention a few companies that have invested in Nigeria and who are investing in Nigeria. Do you think the western companies have been too slow to catch on the growth that is taking place now in Nigeria? And in elsewhere in Africa, for instance, because there has been so much focus so much in Chinese investment in Africa in the past. Let’s say a decade.

Dr. Ngozi Okonjo-Iweala: Well, let me say this when you look at what is happening in Africa, I think there are two interesting phenomenon that you really need to look at. One is that most of our investments now are South-South. It’s coming from China, India, Brazil and other African countries. South Africa is a major investor in Nigeria, for instance. And this is a phenomenon that is happening all over the continent. In developing countries as a whole, South-South investment is big. There is one other piece of interesting information and that is Africa-to-Africa investment is increasing. Nigeria is investing in so many other African countries. Our banks are in fifteen countries, our cementing plants being built by Dangote in more than twelve to thirteen countries. So we are also investing in each other. Now what I see is, of course North-South or South-North investment is very important. We value it, but the point is that there may be a little bit slow. I say to investors from the North, they really have to work quite hard now in order to be able to catch their opportunities.

Markus Karlsson: Do you think Western companies; European companies for instance are taking the African market for granted?

Dr. Ngozi Okonjo-Iweala: I will be presumptuous for me to say that, I don’t know if they are taking it for granted. But I do know that if they don’t scramble for the opportunities that are emerging now they will be left behind.

Markus Karlsson: And who is going to take over if they are indeed left behind?

Dr. Ngozi Okonjo-Iweala: Countries from the south. I mean countries from the south. We have countries coming in everyday. Indonesians making investment, it’s not just the BRICs but also the non-BRIC countries are coming in to make investment. And our own domestic investors are also seizing the opportunities, which is really what you want to see. First and foremost, investors need to see your own domestic investor, putting in money in the country and that’s happening big time in Nigeria. You know we’ve got a company called Innoson manufacturing cars now. Almost more than 50% of the part built in Nigeria, that’s amazing to me.

Markus Karlsson: Let me just ask you about the business climate in Nigeria. You use to work for the World Bank. The World Bank comes out with its annual doing business report. In that business report Nigeria is in spot 147 out of 189 countries. Doesn’t that scare off potential investors?

Dr. Ngozi Okonjo-Iweala: Not really, I think if you look at many of the BRICs, their positions are not that great. Some of them are in 100, while some are in 88. They are not at the top. That doesn’t mean that we don’t need to do better, of course we would like to do better. But we need to look at those particular areas on how we are being scored and focus on them. It is true that we have a lot of bureaucratic hurdles. I’m not saying we are in the position we want to be. We have pledged to work very hard, I think point by point. I think what we are doing now is that we have a competition council that have been set up. Minister of trade and investment is taking this on and we are going to take this point one by one. We are seeing that it is not really scaring off investors. Nigeria is the largest destination for investment in Africa.

Markus Karlsson: So do you think investors are looking at the growth rate than other factors, so to speak.

Dr. Ngozi Okonjo-Iweala: Yes, they probably are. But that does not make us complacent, I think the question we ask ourselves is, “Yes, we are the largest destination for investment” maybe we could get more if we solve some of those problems. I’m not here to say that we feel very glad. We are not where we want to be and we have to work very hard as a country. We are not complacent at all and let me say this, growth is not everything. You know we are growing, but we are not creating enough jobs. And we have young people coming into the market, so we worry every time about whether the type of growth, we have is the type we need to have. That’s why we are happy that the non-oil sector; this attempt that the president is pushing to diversify is beginning to work now. This past 12 months we created about 1.6 million jobs. We need about 2 million, so we are not there yet.

Markus Karlsson: We are going to wrap it up there Ngozi Okonjo-Iweala; it’s been a pleasure to speak to you. Thank you very much indeed for being here. With that we are going to wrap up this edition of Business Interview. Thanks for watching.

Must evey politician have a paid agent on Nairaland?

The thing is, ur works shld be ur campaign...

Only those who are scared lobbies for 'soul-catchers'

SLIDEwaxie:
Must evey politician have a paid agent on Nairaland?

The thing is, ur works shld be ur campaign...

Only those who are scared lobbies for 'soul-catchers'

Canaanite, you are here already . can you tell me what makes the op a paid agent of a politician.

aguiyi:


Canaanite, you are here already . can you tell me what makes the op a paid agent of a politician.

is because his been paid that is why he thinks everybody is as jobless as he is.if Uve noticed he is always in every thread that says anything good about nigeria so that he can derail it

aguiyi:


Canaanite, you are here already . can you tell me what makes the op a paid agent of a politician.

do the math with response to the moniker and 4 topic abt NOI alone within 4days, profile pics and so on..

Well, not everyone is a dunce, u knw?

https://www.youtube.com/watch?v=xHekZgAlvY4

[size=15pt]Interview on France 24 on the Growth of the Nigerian Economy[/size]

Markus Karlsson talks to the woman who is in charge of this rising economic power. Ngozi Okonjo-Iweala is the Finance Minister of Nigeria. She was in Paris for a summit of African leaders hosted by the French President François Hollande.

SLIDEwaxie:
do the math with response to the moniker and 4 topic abt NOI alone within 4days, profile pics and so on..

Well, not everyone is a dunce, u knw?

do you naturally hate to hear good things about Nigeria or you hate the persons been attributed with such success stories

aguiyi:


do you naturally hate to hear good things about Nigeria or you hate the persons been attributed with such success stories

nope, I dnt hate hearing success stories or people attributed to them...but I'm not an idiott who doesn't knw a that the prayer of the cat is to eat more fried fish...

I agree with Madam Ngozi on the fact that, Nigeria's economy
increases by 6% annually for the last decade but do you realise that, as the economy increases,
unemployment doubled?
Things can only get better tho!

SLIDEwaxie:
nope, I dnt hate hearing success stories or people attributed to them...but I'm not an idiott who doesn't knw a that the prayer of the cat is to eat more fried fish...

@waxie, are you trying to tell me that rats hate fried fish?

its really going to be difficult for a rat and a cat to dwell together in unity . opposition parties and followers in Nigeria are not different, in the west,politicians can be likened to cats and dogs, they can live in the same house and share ideas peacefully but not in naija.

YOU REALLY NEED TO TAKE THE BASHING EASY BRO,ITS BECOMING YOUR STOCK IN TRADE, i understand you detest the happenings in the country and the praises been sang to it but that shouldn't make you always come across as a sadist pls

Nigerian economy has been growing at an average of 7 % since 2001.

aguiyi:





@waxie, are you trying to tell me that rats hate fried fish?

its really going to be difficult for a rat and a cat to dwell together in unity . opposition parties and followers in Nigeria are not different, in the west,politicians can be likened to cats and dogs, they can live in the same house and share ideas peacefully but not in naija.

YOU REALLY NEED TO TAKE THE BASHING EASY BRO,ITS BECOMING YOUR STOCK IN TRADE, i understand you detest the happenings in the country and the praises been sang to it but that shouldn't make you always come across as a sadist pls

dude, u need to meet me and realise how free I am regardless of tribe...I'm so easy going..

But u're right abt wot's driving me mad..but I can never be a sadist..

Thanks anyway