The Obstacles And Opportunities Of Nigeria's Exploding Economy
AUDIE CORNISH, HOST:
Nigeria is one of the continent's fastest-growing economies. Over the last decade it's won debt-relief from international creditors and made reforms to its banking industry. And instead of relying solely on oil revenues its tried to pump up mason industries like the mobile-phone business, which has exploded into a market of 120 million customers. Some have attributed the gains to the work of Ngozi Okonjo-Iweala. She's a former vice president of the World Bank and Nigeria's finance minister. She's been at the U.S.-Africa Leaders Summit this week in Washington and she joins us now. Minister Ngozi Okonjo-Iweala, welcome to the program.
NGOZI OKONJO-IWEALA: Thank you.
CORNISH: Now you're accustomed to hearing the critique that it's not easy to do business in Nigeria. The magazine The Economist wrote back in April that barriers to doing business there are formidable from bureaucracy and graphed to port delays and murky land rights - foreign companies that tough it out in Nigeria have shown they can prosper, even so it is not a place for the fainthearted. What's your response?
OKONJO-IWEALA: My response is that both the past and present administration of Present Goodluck Ebele Jonathan has really focused on this issue of a climate for doing business. I'm trying to reform that climate in various ways by working on these bureaucratic issues, making licenses, registering a business faster than it used to be. And let me say this - the rate of return on investment in Nigeria is at 34 percent and are there about it's one of the highest in the world. You know, we are now the largest economy at $510 billion of GDP. So all line indicators, you know, have been trending in the right direction. And we're really committed to maintaining this.
CORNISH: One indicator were Nigeria is still having trouble is when it comes to corruption. In what ways does this still hamper your growth? What would it take to move Nigeria kind of up the rankings and improving and dealing with corruption?
OKONJO-IWEALA: Yes, this is a real problem. Corruption and governance challenges and I think the key issue is what we're doing to fight this and how this has to be a continuous process. The whole area of pensions. We have a new pension system that has more than $27 billion in savings. And even the old pension system where there was fraud, that has been cleaned up. The oil subsidy fraud, we've cleaned that up. And things have been handled in a transparent manner in the payment of subsidies. So we've scored a number of successes and we also believe that the best way to fight corruption is to build institutions and systems and processes that do not give people the room for corruption. I know all these things sound so technical and they are not very sexy in terms of what people want to hear. But really they are the things you find in developed countries and I strongly believe that this is a platform in this new technology age for us to help fight corruption.
CORNISH: Now while the country has made great strides economically, critics look at the industries that are making the most gains and see that they're creating very high-skilled jobs that are out of reach for much of the population. And unemployment does hover around 23 percent still. And income inequality is rising in Nigeria. How do you see addressing this and how do you square this economic growth with this - so much poverty?
OKONJO-IWEALA: What we are looking at the quality of the growth that we have. It's not good enough to just have growth. You must look at what is creating that growth. And I think that is what we have probably not done as well. So now we are seeing which sectors can create the most jobs. Most Nigerians don't want handouts. They want a job. So we're looking at agriculture. This creates, can create very good quality jobs if we change the way that young people view agriculture. The next area is housing. You know housing creates lots and lots and lots of jobs for carpenters, plumbers, painters, architects interior decorators - so we're really pushing the sector. And we've had a lot of interest from investors in the U.S. who want to come, you know, and help us really make a secondary mortgage market work. We've just launched that. We believe that if we can create these jobs and get our young people working the inequality will begin to tackle it.
CORNISH: We've spoken today about business investment in Nigeria but critics argue that if there's a lot of money going to the elite - mostly in the South and the southern sectors where businesses are - this also fuels a widening gap with the north where the government has been fighting Boko Haram, a militant insurgency. How do you address these underlying factors and what role do you see them playing when it comes to the insurgency?
OKONJO-IWEALA: Yeah. Well, we have to be careful, you know, in ascribing all this to the insurgency. However, it will be true that if they find young people who are not gainfully occupied that this provides an easier ground for recruiting them. And, you know, what we're trying to do is to make sure that our approach to tackling the problems of the insurgency is not just based on military issues alone. But also has an economic dimension for the long-term. And that is developing a base, trying to improve the living standards.
CORNISH: Ngozi Okonjo-Iweala, she is Nigeria's finance minister. Thank you so much for speaking with us.
OKONJO-IWEALA: Thank you.