Heroine of Nigeria's anti-corruption camp quits to West's dismay
By Anne Penketh, Diplomatic Editor
Published: 05 August 2006
Nigeria was in shock yesterday after the woman credited with masterminding the cancellation of the country's $18bn debt resigned as Foreign Minister, after the President abruptly withdrew her remaining responsibilities for economic reform.
A government statement announced that Ngozi Okonjo-Iweala had stepped down because of "a compelling need to take care of pressing family issues".
Mrs Okonjo-Iweala, a former World Bank vice-president, was in London negotiating a new debt relief package when she heard the news of President Olusegun Obasanjo's decision to demote her.
She left London without comment on Thursday, to return home to a statement of regret from the President that she had decided "to leave at this stage of our reform programme" which he said was beginning to yield "positive results".
Speaking on Nigerian television, she thanked the President, who had been "gracious enough to allow me to leave", so that she could take care of her family, who have remained in Washington.
But the resignation of such a prominent African reformist is likely to be greeted with dismay by Western donor countries which had placed great faith in her capacity to deliver.
As Finance Minister since 2004, when she was head-hunted from the World Bank, Mrs Okonjo-Iweala persuaded Western donors that Nigeria was not an oil-rich nation and should qualify for debt relief. She increased civil servants' pay, while slashing their perks, and brought in reforms in banking, insurance, pensions, income tax and foreign exchange.
But her anti-corruption campaign, which saw the Nigerian police chief jailed and a number of judges and senior customs officials sacked, brought her into conflict with the most powerful interests in the land.
Just over a month ago, President Obasanjo took a crucial decision to move Mrs Okonjo-Iweala from the finance ministry to head the foreign ministry, with no reason given.
Mrs Okonjo-Iweala, a diplomatic novice given her previous 20 years' experience as a World Bank economist in Washington, offered to resign, but was mollified by being allowed to remain as chairperson of the economic panel.
Mrs Okonjo-Iweala's successor as Finance Minister, Esther Nenadi Usman, has repeatedly said she would continue the crusade. Mrs Usman has now been promoted to head of the economic team, reuniting the main economic portfolios inside a single ministry.
Speculation has been rife in Nigeria about an ongoing rift between the President and Mrs Okonjo-Iweala. One Nigerian newspaper reported that their dispute escalated this week when Mr Obasanjo learnt that the Foreign Minister was planning to lead Nigeria's delegation to the forthcoming Singapore meeting of the World Bank and International Monetary Fund. As he ordered Mrs Usman to be confirmed as leader of the economic panel, he also reportedly asked Mrs Okonjo-Iweala to confine herself to Non-Aligned Movement issues. This is said to have been the last straw for the high-flying economist. However the most likely explanation is that Mrs Okonjo-Iweala's anti-corruption drive was causing too many waves in the Obasanjo administration, which in 2003 won the doubtful accolade as the most corrupt place on earth, according to Transparency International.
The governor of Abia state, Orji Kalu, told reporters in Lagos that he was not surprised by the resignation. "I knew Mrs Okonjo-Iweala would go because the government is trying to take all the money now and side-track her. Mrs Okonjo-Iweala has done the right thing and I congratulate her for resigning from a government that is not workable; from a government that is very corrupt, and I have told everybody that this government is very corrupt."
Under Mrs Okonjo-Iweala's stewardship, Nigeria became the first African country to be freed of its debt to the Paris club of rich nations last April, under a debt-relief deal that was supposed to clear the way for billions of dollars to be spent on reducing poverty.
She won over the donor countries by arguing that Nigeria is in fact a poor nation where most of the 130 million population live on less than 60p per day - and one in five children does not reach the age of five.
Because of its oil wealth, Nigeria was excluded from last year's landmark deal before the G8 summit in Gleneagles in which rich countries wrote off the debts of 19 of Africa's poorest countries. But Mrs Okonjo-Iweala promised that if the donor countries wrote off 60 per cent of Nigeria's debt, she would pay off the remaining $12bn with money saved by budget reforms. Her plan won the backing of Gordon Brown, the Chancellor of the Exchequer, who pushed for the deal agreed in June last year with the Paris Club.
But the oil industry remains mired in corruption. According to one telling anecdote, when she presented President Obasanjo with a report on the Extractive Industries Transparency Initiative, under which oil and other companies agree to publish what they pay and governments open their accounts to scrutiny, the Nigerian leader sealed it. He was apparently afraid that it would reveal discrepancies between government revenues and the budget.
"Obasanjo didn't want to hear about missing oil revenues, because people would assume that he stole them," one source said.
Nigeria was in shock yesterday after the woman credited with masterminding the cancellation of the country's $18bn debt resigned as Foreign Minister, after the President abruptly withdrew her remaining responsibilities for economic reform.
A government statement announced that Ngozi Okonjo-Iweala had stepped down because of "a compelling need to take care of pressing family issues".
Mrs Okonjo-Iweala, a former World Bank vice-president, was in London negotiating a new debt relief package when she heard the news of President Olusegun Obasanjo's decision to demote her.
She left London without comment on Thursday, to return home to a statement of regret from the President that she had decided "to leave at this stage of our reform programme" which he said was beginning to yield "positive results".
Speaking on Nigerian television, she thanked the President, who had been "gracious enough to allow me to leave", so that she could take care of her family, who have remained in Washington.
But the resignation of such a prominent African reformist is likely to be greeted with dismay by Western donor countries which had placed great faith in her capacity to deliver.
As Finance Minister since 2004, when she was head-hunted from the World Bank, Mrs Okonjo-Iweala persuaded Western donors that Nigeria was not an oil-rich nation and should qualify for debt relief. She increased civil servants' pay, while slashing their perks, and brought in reforms in banking, insurance, pensions, income tax and foreign exchange.
But her anti-corruption campaign, which saw the Nigerian police chief jailed and a number of judges and senior customs officials sacked, brought her into conflict with the most powerful interests in the land.
Just over a month ago, President Obasanjo took a crucial decision to move Mrs Okonjo-Iweala from the finance ministry to head the foreign ministry, with no reason given.
Mrs Okonjo-Iweala, a diplomatic novice given her previous 20 years' experience as a World Bank economist in Washington, offered to resign, but was mollified by being allowed to remain as chairperson of the economic panel.
Mrs Okonjo-Iweala's successor as Finance Minister, Esther Nenadi Usman, has repeatedly said she would continue the crusade. Mrs Usman has now been promoted to head of the economic team, reuniting the main economic portfolios inside a single ministry.
Speculation has been rife in Nigeria about an ongoing rift between the President and Mrs Okonjo-Iweala. One Nigerian newspaper reported that their dispute escalated this week when Mr Obasanjo learnt that the Foreign Minister was planning to lead Nigeria's delegation to the forthcoming Singapore meeting of the World Bank and International Monetary Fund. As he ordered Mrs Usman to be confirmed as leader of the economic panel, he also reportedly asked Mrs Okonjo-Iweala to confine herself to Non-Aligned Movement issues. This is said to have been the last straw for the high-flying economist. However the most likely explanation is that Mrs Okonjo-Iweala's anti-corruption drive was causing too many waves in the Obasanjo administration, which in 2003 won the doubtful accolade as the most corrupt place on earth, according to Transparency International.
The governor of Abia state, Orji Kalu, told reporters in Lagos that he was not surprised by the resignation. "I knew Mrs Okonjo-Iweala would go because the government is trying to take all the money now and side-track her. Mrs Okonjo-Iweala has done the right thing and I congratulate her for resigning from a government that is not workable; from a government that is very corrupt, and I have told everybody that this government is very corrupt."
Under Mrs Okonjo-Iweala's stewardship, Nigeria became the first African country to be freed of its debt to the Paris club of rich nations last April, under a debt-relief deal that was supposed to clear the way for billions of dollars to be spent on reducing poverty.
She won over the donor countries by arguing that Nigeria is in fact a poor nation where most of the 130 million population live on less than 60p per day - and one in five children does not reach the age of five.
Because of its oil wealth, Nigeria was excluded from last year's landmark deal before the G8 summit in Gleneagles in which rich countries wrote off the debts of 19 of Africa's poorest countries. But Mrs Okonjo-Iweala promised that if the donor countries wrote off 60 per cent of Nigeria's debt, she would pay off the remaining $12bn with money saved by budget reforms. Her plan won the backing of Gordon Brown, the Chancellor of the Exchequer, who pushed for the deal agreed in June last year with the Paris Club.
But the oil industry remains mired in corruption. According to one telling anecdote, when she presented President Obasanjo with a report on the Extractive Industries Transparency Initiative, under which oil and other companies agree to publish what they pay and governments open their accounts to scrutiny, the Nigerian leader sealed it. He was apparently afraid that it would reveal discrepancies between government revenues and the budget.
"Obasanjo didn't want to hear about missing oil revenues, because people would assume that he stole them," one source said.
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another article..................
Niger Delta Human Development Report: Grinding Poverty & Deprivation in N-Delta
Posted to the Web: Monday, August 07, 2006
But these livelihoods have also become unattractive because of weak earnings relative to the oil sector.
There is a need not only to revive the traditional forms of work, given the transient nature of the oil industry, but also to give a wider spectrum of people opportunities for survival through a more diverse economy.
Poverty is a cross-cutting issue with numerous dimensions. While it may be measured in terms of the income or resources of an individual, many of the conditions that perpetuate or alleviate poverty are at the communal or societal level. Poverty in the Niger Delta region encompasses the issues of discrimination, neglect and the lack of a voice. Another dimension is that the people of this region have been excluded from tapping into modern infrastructure, even as the resources for transforming other parts of the country have poured out of the Niger Delta.
While poverty may seem to cause deprivation and hinder individual development, it is also the consequence of a number of social and national factors, such as poor governance and the exclusion of particular social groups, including minority ethnic groups, women and youth, from participation in decision-making on matters relating to their welfare. Other issues include poor environmental quality and high levels of pollution, conflict and lack of security, threats to health and well-being including HIV/AIDS, and unsustainable livelihoods and unemployment.
THE REVENUE BASE OF HUMAN DEVELOPMENT
Poverty in the Niger Delta region encompasses the issues of discrimination, neglect and the lack of a voice.
Oil wealth enriches Nigeria as a country, but it has not alleviated the grinding poverty, neglect and deprivation in the region that produces it.
Oil wealth derived from the Niger Delta region sustains the Nigerian Federation. Oil revenues, in the form of crude oil and gas exports, petroleum profits taxes and royalties, and domestic crude oil sales accounted for an average of 79.52 per cent of the total revenues of the Federation from 2000 to 2004. During the same period, the contribution of oil to total export earnings was 79.53 per cent (computed from Central Bank of Nigeria 2004). Tables 2.2a and 2.2b show huge increases in revenues accruing to the Federal and Niger Delta state governments between 1999 and 2003. Statutory allocations from the Federation Account constitute a substantial part of the total (see column 4 in table 2.2b).
The role of oil revenues in the statutory allocations cannot be overemphasized. Yet the problem of grinding poverty, neglect and deprivation in the region that produces the nation’s oil wealth has remained a daunting reality. The tables show that capital expenditures to provide a basis for rapid progress on human development are low compared to recurrent expenditures on personnel and overheads. While total expenditures increased sharply between 1999 and 2003, the quality of such spending was invariably low, considering the already low level of human development. Bad governance and corruption perpetuated these patterns.
Bad governance and corruption have played essential roles in perpetuating low levels of human development.Table 2.2 (a): Revenues and Expenditures of the Federal Government and States in the Niger DeltaRegion, 1999 Revenues Expenditures Fed Govt./ Total Statutory Share of statutory Total Recurrent Capital Share of states revenues allocation allocation in expenditures expenditures expenditures capital ex- (N’mn) (N’mn) total revenues (%) (N’mn) (N’mn) (N’mn) penditures in total (%)
Federal Govt. 662,585.3 218,874.5 33.0 947,690.0 449,662.4 498,027.6 52.5
Abia 3,458.3 2,268.5 65.5 3,544.9 2,245.2 1,299.7 36.6
Akwa Ibom 5,389.6 3,161.1 58.6 5,389.6 3,377.3 1,889.3 35.0
Bayelsa 3,938.8 2,666.4 67.6 3,923.5 2,708.4 1,215.1 30.9
Cross River 3,824.9 2,786.4 72.8 3,948.6 2,302.4 1,546.2 39.1
Delta 6,690.1 3,382.8 50.5 7,145.5 4,431.2 2,714.3 37.9
Edo 5,127.2 2,644.2 51.5 5,027.7 3,179.8 1,847.9 36.7
Imo 3,540.5 2,526.5 71.3 3,474.2 2,071.9 1,402.3 40.3
Ondo 4,049.6 2,621.1 64.7 3,941.8 2,681.3 1,260.5 31.9
Rivers 8,379.4 3,196.5 38.1 7,579.2 4,002.6 3,576.6 47.1
Source: Central Bank of Nigeria 1999.
Table 2.2 (b): Revenues and Expenditures of the Federal Government, States and the NDDC in the
Niger Delta Region, 2003 Revenues Expenditure
Fed Govt./ Total Statutory Share of statutory Total Recurrent Capital Share of states/NDDC revenues allocation allocation in total expenditures expenditures expenditures capital ex-(N’mn) (N’mn) revenues (%) (N’mn) (N’mn) (N’mn) penditures in total
Fed Go vt. 1,023,241.2 889,197.8 86.9 1,225,965.9 984,277.6 241,688.3 19.7
Abia 17,496.0 12,846.8 73.5 17,022.4 8,562.8 5,588.9 32.8
Akwa Ibom 39,906.5 30,655.5 76.8 56,737.0 34,000.0 20,633.0 36.4
Bayelsa 38,716.0 34,741.9 89.7 27,982.2 13,853.1 10,250.9 36.6
Cross River 17,466.9 12,436.8 71.2 14,542.6 8,225.8 3,300.0 22.7
Delta 65,057.0 51,191.8 78.7 67,148.6 40,858.6 25,410.2 37.8
Edo 17,242.0 11,891.5 69.0 17,292.0 12,564.4 2,169.7 12.5
Imo 18,337.9 13,889.3 75.7 35,175.1 20,922.2 7,277.1 20.7
Ondo 30,528.0 15,114.5 49.5 38,834.4 16,252.3 21,719.0 55.9
Rivers 73,415.0 41,984.1 57.2 70,233.6 36,699.0 28,779.5 41.0
NDDC* n.a. 9,044.5 n.a. n.a. n.a.
Note: *The revenue of the NDDC for the years 2000, 2001 and 2003 was N19,988.9 million.
Source: Central Bank of Nigeria 2003.
GOVERNANCE AND POVERTY
Given the abject poverty in the Niger Delta, there is a strong basis for people’s demands for a greater share of the region’s vast oil revenues, particularly as they bear the full burden of environmental degradation caused by the oil industry.Agitation to achieve this goal has spawned various youth groups determined to use violence to claim a share of the wealth they believe to be theirs by right. As shown in chapter one, the revenue allocation system has been contentious, with the oil-producing states shortchanged since the beginning of military rule.
Successive governments progressively reduced the derivation percentage from 50 per cent until it was zero during the military era.
The agitation for the control of resources has achieved much in drawing government attention to poverty in the Niger Delta and in ensuring that more revenues are assigned to the area. The derivation percentage was raised from three per cent to 13 per cent in 1999, although this still does not satisfy local demands. The National Political Reform Conference held in 2005 was willing to recommend an increase to 17 per cent, but this was not enough for regional delegates. Delegates from other regions, however, could not accommodate the demand for an immediate increase to 25 per cent and a programmed increase to 50 per cent in the medium term.
The stalemate brought the Conference to an abrupt end and resulted in heightened tension. Militant youths stepped up activities such as hostage-taking and the disruption of oil prospecting and production activities to pressure “Poverty is caused by poor management and governance. If government manages our resources very well . . . to build hospitals, schools, good roads, poverty will be reduced. When children go to good schools, and there are cheaper drugs in our hospitals, everyone will cater for his health and thus reduce the impact of poverty. So our government is causing poverty on the people because they have refused to
A low level of physical development points to the fact that the region suffers from poor governance, authorities to make further concessions. The subsequent arrest and detention of some leaders from the core Niger Delta states appeared to be exacerbating the feeling of political marginalization.
While the Niger Delta region deserves much greater attention and revenues to deal with poverty and infrastructure needs, it is also important to acknowledge that, even though the percentage allocated to the delta from the Federation Account appears small, in real terms it amounts to substantial sums of money, enough to significantly improve the well-being of citizens through better service delivery and access to utilities. The fact that the level of physical development in the region has not improved underscores that it also suffers from poor governance. That the Federal Government has had to intervene from time to time to create regional bodies like the OMPADEC and the NDDC to plan for and implement development projects in the region is itself evidence of the failure of state and local governments to carry out their responsibilities to the people. The absence of government in many communities is behind the provision of socioeconomic infrastructures by some oil companies.
As in other parts of Nigeria, the Niger Delta region has been split into more states in order to create more centres of growth and administration, and to spread development more evenly across the region. But the benefits of this state creation exercise are not obvious—the states simply have failed to perform. In the core Niger Delta states of Delta, Rivers and Bayelsa, infrastructural development, social amenities and facilities are unduly concentrated in a few cities, notably the state capitals and older administrative headquarters, without much regard for development in other parts of these states.
In a region that produces so much fuel, for example, the electricity supply is very sporadic—Bayelsa State is not even linked to the national electric power grid.
The delta could be served with thermal power stations strategically located to serve the needs of every part of the region. But this is not the case.Similarly, the delta has a dense network of freshwater distributaries and vast reserves of groundwater, but no part of the region can boast of a regular supply of potable water. And while the watery terrain across the region greatly increases the cost of road building and construction of all types.
Continues tomorrow
