Politics
Ngozi Okonjo-Iweala says Nigeria is on the rise
Nigeria has a strong, buoyant economy receiving billions of dollars of foreign and domestic direct investment in power, petrochemicals, agriculture and consumer goods, but it needs to grow faster to reduce poverty, its finance minister said. In a spirited response to what she called a trend of “talking down on Nigeria”, Ngozi Okonjo-Iweala said she was not concerned about short-term outflows of portfolio investment which did not reflect the macro-economic fundamentals and long-term prospects of Africa’s No. 1 crude producer.
She went on to say, in an interview late on Sunday after hosting a meeting in the Nigerian capital of African finance and planning ministers, “We must be careful not to start believing in the pessimism that is hung around our necks.” Africa’s second largest economy has experienced currency, debt and stock market outflows as it suffers contagion from an investor flight from emerging markets triggered by the U.S. Federal Reserve’s winding down of its bond-buying program.
Political risk concerns have also increased ahead of what is likely to be a hotly contested presidential election due early next year, and following President Goodluck Jonathan’s suspension in February of respected central bank chief Lamido Sanusi after he had publicly questioned massive oil revenue leakages in the state oil firm.
“I don’t care about portfolio flows, I’m interested in FDI (foreign direct investment),” said Okonjo-Iweala, adding that Nigeria was much less dependent on portfolio flows for its financial stability than other emerging market economies. She also went on to say, “We are not like South Africa or Turkey or any of these countries”.
“Just look objectively at our indicators,” she said. “We have a current account surplus, we have inflation that is going down, to 7.7 percent, we have a fiscal deficit of 1.9 percent of GDP, we have a debt-to-GDP ratio of 21 percent … a growth rate of 7 percent over the past decade.”
The government was projecting gross domestic product (GDP) growth of 6.75 percent this year, slightly less than the 7.3 percent forecast by the IMF, up from 6.4 percent in 2013. “But we are terrible, that’s all we ever hear,” the finance minister said with irony, in her rebuttal of what she said were persistently negative portrayals of Nigeria, which faces security and governance challenges, including oil theft, corruption and an insurgency by Islamist sect Boko Haram.
Okonjo-Iweala said however the economy had to grow faster to “really turn the tide on poverty” still affecting a majority of those living in the most populous nation in Africa. “We need a faster growth rate than 7 percent,” she said.
