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Finance Minister Africa & Middle East

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Reforming Nigeria was never going to be easy but finance minister Ngozi Okonjo-Iweala, a former World Bank vice-president, has not avoided stepping on toes in her quest to transform public finances while launching a broad assault on corruption.

She has gone head-to-head with the country’s many vested interests and crooked officials. So far, the early scoring is in her favour.

Better-than-expected oil prices helped to swell government coffers in 2004, bestowing an appearance of respectability on the well-being of public finances.

In the past, budgets were either missed – in 2002, the fiscal deficit equalled 5.6% of gross domestic product – or in years of abundance, when oil prices were higher than budgeted levels, the surplus was squandered.

Not so under Mrs Okonjo-Iweala. She has resisted spending the oil windfall, to keep in reserve for leaner years; she is keeping a hawkish eye on cashflow to avoid reckless overspending without knowing when or if revenues will arise; she has rationalised and streamlined capital projects, directing investment toward priority sectors and aiming to reduce the large numbers of uncompleted projects; and she has drafted laws to hold finance officials accountable to spending limits. The whole budget process has been overhauled to improve planning and co-ordination, and now includes a three-year expenditure framework.

Not content with that, Mrs Okonjo-Iweala has turned her attention to the difficult job of determining the government’s vast payment arrears and bringing order to the chaotic and wasteful public service payroll.

In many ways, Mrs Okonjo-Iweala is the sharp end of President Olusegun Obasanjo’s economic plan. She is indefatigable and combative, facing off resistance and pushing through reform, in contrast to the president’s conciliatory style that has been credited with holding together the country’s numerous quarrelsome factions. She has brought impetus to the president’s broad reform plan, which is sound in principle but would probably lack effect without her.

Mrs Okonjo-Iweala’s work is far from done and there is no guarantee that she will survive the anti-reform elements. But, in awarding her Finance Minister of the Year for Africa and Middle East, The Banker recognises that she has already made substantial progress.

Given the parlous state of Nigeria’s administrative and governing structures, her achievements are all the more commendable.

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