The accidental economist: Dr. NGOZI OKONJO-IWEALA

Published 10 years ago
The accidental economist: Dr. NGOZI OKONJO-IWEALA

FORBES lists Dr. Ngozi Okonjo-Iweala as one of the world’s 100 most powerful women. In charge of the public purse in Nigeria, Africa’s most populous nation, she also serves as chief coordinator of the economy, effectively overseeing all of the country’s economic ministries. A renowned development economist and reformer, Okonjo-Iweala has served the Nigerian government and the World Bank for most of her career.

Her lifelong interest in economics was sparked when she was just a little girl. Okonjo-Iweala fondly recalls the genesis of her fascination with economics.

“I had a wonderful upbringing. My parents were academics. Both were lecturers at the University of Ibadan and I remember sitting around the dinner table, having interesting debates with them.”


Like all daughters, she would often demand her father’s attention, insisting that he take a break from his work.

“I was an avid reader. I had read all the children’s books at home and was asking my father to buy more or to take me to the library. My father, a mathematical economist, was working on a paper for publication and didn’t want to be disturbed. So to keep me quiet, he reached for his bookshelf, grabbed a book and gave it to me saying, ‘read the first chapter’, so that he can ask me questions later,” she recalls.

Happy that she had managed to get her father’s attention, Okonjo-Iweala settled down to read, but the book turned out to be about economics.


“It was so boring! I was reading it and crying, then decided with deep resolve that I wouldn’t go near economics again,” she laughs.

But that deep resolve would later give way to a passion for economics, which Okonjo-Iweala believes explains our everyday existence.

“Economics was really something that explained the world to me. It captured the common sense of the way the world works with analytics and the dynamics of development, which have intrigued and concerned me all my life,” she says.

As an undergraduate student at Harvard University in Massachusetts, US, Okonjo-Iweala became interested in spatial and economic relationships. She was intrigued by geography and the dynamics of urban and rural economics in relation to poverty.


“I didn’t go to Harvard thinking I would do economics, as I thought it would be dead boring. But because they didn’t have geography as a core subject, economics was the closest subject that I could do to satisfy my curiosity,” she explains.

Okonjo-Iweala’s relationship with Harvard was also accidental as she had been accepted at Cambridge. Her godmother was lobbying hard for her to move to England and complete an undergraduate degree at Cambridge University.

“I passed the entrance exams for Cambridge and Harvard but when I was 18, my mother, who had been lecturing and working as a researcher, gained admission to Boston to do her PhD. Everyone then thought that as my mother was going to Boston that I should go with her, being a young teenager. Much to my godmother’s disappointment I thus proceeded to study at Harvard, based on vast fa-mily opinion.”


She later came to love her Ivy League Alma Mater. Okonjo-Iweala received a solid education from Harvard, and enjoyed its approach to academics and teaching. Her association with the university was continued by her children, who also studied there.

“I had come from a tradition where I had learnt a lot through long essay memorization and theory, which was not enough to challenge my thinking. I found the Harvard approach analytical, making me ask more questions about daily life and the validity of it. I had to work at problems and come back with solutions. It certainly opened my eyes, and since I had had a good time there, my husband and I decided that our children would go there also.”

As chief coordinator of the Nigerian economy, Okonjo-Iweala is charged with implementing President Goodluck Jonathan’s transformation agenda. It consists of various projects and programs aimed at reducing poverty and improving living standards. Okonjo-Iweala says one of its key objectives is human capital development, with a specific emphasis on job creation for young people.

She believes the country’s economy needs to diversify and move away from being purely extract-driven. Nigeria is Africa’s largest oil exporter, and the world’s 10th-largest oil producer, accounting for more than 2.2 million barrels a day in 2011. That same year, oil revenues totaled $50.3 billion and generated 70% of government revenue.


“I think Nigeria as a country has a ‘can-do’ spirit and if we set our minds to it, we can achieve anything. Currently we are looking at sweeping reforms in the agriculture sector, for example, where the agriculture minister is teaching us to look at the agriculture value chain as an end-to-end business. This is a new way of thinking for us and can produce jobs and food for our society. We are looking at all sectors of our economy to see where we can add value or seize an opportunity for development. Like the housing sector, where we have a deficit of 17 million units and don’t have a functioning mortgage system… This can create employment for plumbers, carpenters, interior decorators.”

On a recently concluded a roadshow in Europe and the US, Nigeria sold $1 billion bonds with ease. The bonds, which were four times oversubscribed, were improvements on investors’ response to the $500 million bonds floated in 2011. This shows confidence in the strength of the Nigerian economy, Okonjo-Iweala says.

“On the economic side, macro-economic stability has been restored. Remember there were the lost two decades in Africa, in the 80s and 90s, where there was instability such that people could not focus on areas that could create jobs. Things are turning right because we had growth of 6.5 percent last year and we are projecting the same number this year, compared to the average 5 percent in other African countries.”


Nigeria’s booming film industry, better known as Nollywood, is the world’s third-largest producer of feature films and another area targeted for expansion. Unlike Hollywood and its Indian counterpart, Bollywood, Nollywood movies are made on shoestring budgets and have short turnaround times. An average production takes just 10 days and costs approximately $15,000. In 13 years, Nollywood has grown from humble beginnings into a $250 million-a-year industry that employs thousands of people. It has exploded into a fast-growing sector that has pushed foreign media off the country’s screens and shelves, and is now marketed all over Africa and the rest of the world.

Okonjo-Iweala is very passionate about Nigeria’s creative industry. She says it is an important and rich cultural tapestry, showcasing world-renowned artists, writers, musicians and fashion designers.

“Some say I am an advocate for Nigeria and I am. I can’t help it! I love my country and I am proud of it. I love all things Nigerian; all things African,” she says proudly.

However, holding the public purse strings is no easy task. Tough trade-offs need to be engineered, and not everyone is sanguine about Okonjo-Iweala’s policies. She has been criticized by detractors, who argue that her policy strategies have brought hardship to Nigerians. When she was re-appointed to the position of finance minister, with the expanded portfolio of coordinating the economy, Okonjo-Iweala took on an important role. She has extensive influence to shape the direction of Jonathan’s economic team and his transformation agenda. But she has also taken a lot of heat for the unpopular policy decision that saw the national fuel subsidy removed. She stood her ground though, arguing it was the only way forward if Nigeria’s economy was to survive.

Okonjo-Iweala has also come in for flak from non-profit organizations, which accuse her of attempting to introduce International Monetary Fund (IMF) and World Bank economic policies that have failed in countries similar to Nigeria. These policies, some claim, are part of a deliberate attempt to ensure Nigerians are perpetually poor and that the country continues to be a market for the West. The fuel subsidy decision triggered a nationwide riot and led to the Occupy Nigeria protests in January 2012.

Nigerians have watched the return of Okonjo-Iweala with interest. As finance minister under former president Olusegun Obasanjo, she led the vigorous negotiations that enabled the country to exit four decades of crippling foreign debt in 2005/06. This time around, however, her ambitious plans to fund infrastructure have led to more borrowing, with critics accusing her of leading Nigeria into new debt accumulation.

However, the spectacular rise of Okonjo-Iweala cannot be disputed and she is widely respected, both in Nigeria and worldwide. Her upbringing and educational background, which includes a PhD in Regional Economics and Development from the Massachusetts Institute of Technology (MIT), have certainly prepared her for her challenging roles.

She served as Nigeria’s finance minister and foreign minister, between 2003 and 2006. During this first stint as finance minister, Okonjo-Iweala led Nigeria’s economic team, which was responsible for implementing the Obasanjo administration’s far-reaching economic and social reform agenda. The reforms made particular progress in restoring macroeconomic stability, tripling growth and transparency.

From October 2007 to July 2011, Okonjo-Iweala served as the managing director of the World Bank. She says it was a bit like coming home; prior to her ministerial career, she was the vice president and corporate secretary of the World Bank Group. Then in August 2011 she was re-

appointed as finance minister, this time under Jonathan.

Arguably among the most competent and experienced economic minds in Nigeria, in 2012 she was one of three candidates for World Bank president. And on September 17, 2013, she was inducted as a fellow of the Nigerian Economic Society. The recognition comes 18 years after her father, a mathematical economist, was honored by the society.

Okonjo-Iweala’s intriguing story highlights the opportunities and challenges she faced from an early age. She credits her grandmother as a seminal influence on her life.

“Whilst my parents were studying overseas, I was raised by my grandmother, from the age of one until the age of nine. She was a disciplinarian and an incredible woman who didn’t let me know anything about privileges. She fried her own cassava flour, believing that hers was better than that bought in the market. And I had to sweep, fetch water and even crack palm kernels at the weekend.

“I used to question why I had to do all these things, but even though my grandmother was strict, she brought me up with so much love that, looking back over the years, I am grateful for all she taught me. She helped define and prepare me for my future.”

Part of that future involves finding practical solutions to real problems. While ideological debates rage on and nations struggle to define economic policies that will address structural inequalities and deliver inclusive growth, Okonjo-Iweala points out that economics is not an exact science. She says markets are impacted by human behavior.

In the wake of global slowdowns, many countries are caught between introducing austerity measures and going the route of stimulus packages to kick-start local economies. Having been at the World Bank, Okonjo-Iweala knows all too well about the structural adjustment policies that were the staple diet prescribed to many African countries by Bretton Woods institutions.

“We have all kinds of theories and formulas and rules that we can apply to the economic world around us, however there is always the ever-present variable of human free will. There will always be a certain number of people who will do the unexpected. For this reason, economics is a very precise science, however it can never be exact due to human behavior.”

She also knows that growth for its own sake will not enable developing countries to move beyond vexed social inequalities and joblessness. And while she shies away from the hurly-burly of Nigerian party politics, Okonjo-Iweala is enough of a politician to know that policies that do not speak to creating jobs or dealing with inequality and poverty simply won’t fly in Africa’s second-largest economy.

It would also be out of sync with the economic ethos developing on the continent. Currently, African nations are focusing on infrastructure development, beneficiation and adding value to the economic chain, instead of being stuck as exporters of raw materials.

Okonjo-Iweala also knows that the diversification of the Nigerian economy, particularly its agricultural sector, requires the active participation of women.

She urges women to enter the field of economics, especially the average African woman, many of whom do not see economics as a first choice.

“Women should not shy away from economics. We really need people who understand the macro dynamics of the economy, even at household level. If not, we can’t steer the economy in the right way. We need to be able to read the signals and inter-actions of one variable to another, and it helps if you understand the discipline,” she points out.

She says economics is everybody’s business, but women have an important role to play. This belief in part explains why she was in the running for the World Bank presidency in 2012. Traditionally, the post is given to the candidate put forward by the US, but developing countries pushed for change last year and nominated Okonjo-Iweala. Of the three candidates, she received wide support, not only from African leaders but also from emerging economies and renowned economists. Even a group of former World Bank officials wrote a letter backing her as its next president. In the end, however, the job went to Dr. Jim Yong Kim.

Explaining her decision to accept the nomination for the World Bank presidency, Okonjo-Iweala says her relationship with the institution dates back to her time at MIT, when she was a “young professional”, writing her doctoral thesis.

“I had done a summer job at the World Bank and it was such an interesting job. I worked on sites and service and urban projects for lower-income groups to get housing, and as I was passionate about development and changing the face of poverty, this was a good experience to have.

“My intention was always to come back home. I wanted to work there (the US) for two or three years and acquire global experience, and come back to Nigeria. I applied through the Young Professionals Program in 1981 and out of 2,000 applicants, 25 of us were chosen. The work became so interesting and the years went by very quickly whilst I worked my way up to managing director of operations.”

On the politics of appointments at the World Bank, she says: “It made me feel very proud to be an applicant for the World Bank presidency because the people who pushed for me included African presidents like (South African) President Zuma, President Ouattara (of the Ivory Coast) and the AU (African Union). All of them urged my president to tell me to compete. I had only spent eight months on the job as finance minister but they thought that it was great that our continent had candidates that could do the job.

“President Jonathan was very supportive, and although I was initially hesitant, I then began to think I had the credentials. I had the passion and if it is Africa that shows that global governance needs to change, then I would do so.”

Okonjo-Iweala says she felt ready to take on the top job because she has not only done the academic research, but has “lived the experience”. Develop-ment is not just an ideological notion to her.

“We lived through very rough times during the Biafra War, which lasted three years. We ate one meal a day and my parents lost everything in their mid-forties. We slept on the floor and saw people dying all around us. Today I can either sleep on the floor or on a feather bed. I have lived through poverty and almost had a terrible episode in a village (while writing) my PhD due to poor sanitation. I also almost lost my first child in childbirth, so maternal mortality and babies dying are very real to me. I think that if you are going to run institutions like the World Bank you have to have lived it.”

Okonjo-Iweala says that her nomination alone has broken the boundaries of the exclusive circle of privilege occupied by developed countries. She is convinced that Africa genuinely stands a chance to lead come 2017.

“I believe that next time around it will be different. Developing countries are still saying thank you to me for being an example.”

The experience has taught her leadership is about passion, determination, strength of character and the desire to give back. Okonjo-Iweala says women often doubt themselves and focus on the challenges rather than their passions and whether or not they enjoy what they do. She points out that women tend to work “really hard” but rarely ask themselves if they have the passion for their jobs. “I would be lying through my teeth if I said being the minister of finance is fun,” she concedes.

“Whatever the leadership position, it’s about what you want to achieve. As I mentioned, I had a wonderful upbringing. We had an atmosphere of debate at the dinner table, and my parents taught me about responsi-bility, and that education is to be used for a better end. Women should ask themselves: ‘what I can give back that am I passionate about?’ It is from there that a sense of purpose and leadership comes about.”

A day after FORBES WOMAN AFRICA interviewed Okonjo-Iweala, the Nigerian president reshuffled his cabinet, axing nine ministers. Unsurprisingly, she was not among them. While she is no stranger to the intricacies of high office, Okonjo-Iweala has a reputation as an outsider to the inner wrangling of the political elite, and has been described as ‘technocrat’ rather than a politician. It could stand her in good stead as Nigeria’s strongmen gear up for the presidential elections, scheduled for 2015.

She is often singled out as a star performer in President Jonathan’s cabinet and her global profile has helped to elevate Nigeria’s efforts to deepen democratic reforms post the military regimes of old.

Okonjo-Iweala has become the face of the modern, fast-growing and opportunity-filled Nigeria, as it jostles on the continent, always eager to usurp South Africa as Africa’s economic leader.

While assessing Nigeria and South Africa sometimes amounts to comparing apples with pears, Nigeria’s appeal as an investment destination of choice has been greatly enhanced by Okonjo-Iweala’s inclusion in politics. As the holder of the public purse strings, she has become a game changer, not only in her own right, but also in re-

positioning Nigeria’s vast oil riches.

Her detractors and supporters do not see eye to eye on much, but one thing they do agree is that Okonjo-Iweala’s impact on her country will be felt long after she has departed the scene.