Nigeria’s Finance Minister Ngozi Okonjo-Iweala will run for the World Bank’s top job as a potential successor to Robert Zoellic. Okonjo-Iweala said she was ‘absolutely’ confident of her bid but the writer says Africa must rally around her candidacy. Picture: Reuters
The announcement last week of Nigerian Finance Minister, Mrs Ngozi Okonjo-Iweala, as a candidate for the Presidency of the World Bank (WB) is most appropriate.
The Bretton Woods Institutions have long been dominated by American or European leaders, with the World Bank only boasting American candidates since its inception in 1944. While much has been written about the shortcomings of the Bretton Woods Institutions, the impact of these institutions in the global economic space and in particular their impact on the developing world is undeniable. The growth of the developing economies, the emergence of new economic blocs such as the BRICS and the ascending influence of policy makers from the emerging markets raises the issue of placing a leader from the developing countries at the helm of the bank.
I think it is fair to say that President Barack Obama’s nomination and backing of a South Korea-American health expert, Jim Yong Kim, constitutes a surprise and yet offers an opportunity. The other candidate is Minister of Finance of Colombia, Jose Antonio Ocampo.
The contributions to the global economy made by the developing world amount to almost 50%, a clear illustration of the need to incorporate the developing world in “running the business”. The unwritten rule that the World Bank president is an American and the IMF a European is in need of review and the best time to do it is through this latest bid for the presidency of the World Bank. A move to appoint a non-American is seen as letting go of the old guard in favour of new ideas and a move to rejuvenate perceptions about the World Bank. It is time to break the tradition. This call has been made before with leading voices that include Minister in the Presidency Trevor Manuel and former Rwanda Finance Minister (now president of the Africa Development Bank), Dr Donald Kaberuka.
With Minister Ngozi Okonjo-Iweala at the helm it is not only developing countries that will have a stronger voice, but also Africa specifically. Africa has not only made great progress in developing its markets and its democracy, but has also made tremendous strides in achieving greater economic growth. As an investment destination, Africa is now a recognised growth market. In addition to being an innovative environment in the mobile communication technology arena, the continent offers immense opportunities in the form of water reserves, arable land and unexploited mineral and natural resources. With a market of nearly one billion consumers and host to some of the fastest-growing economies in the world, Africa offers new frontiers for both the West and the East.
The African Development Bank (AfDB), in its publication: “Africa in 50 Years’ time: The Road to Prosperity”, reports that the African continent enjoyed good growth and yielded positive economic inidcators in the period 2006 to 2008, with an average annual growth amounting to about 6% and a growth in gross domestic product (GDP) per capita reaching almost 4%.
A strong rebound after the tumultuous global financial and economic crisis in late 2008 and 2009 was evident as the continent’s average growth rate for 2010 amounted to 4.9%, up from 3.1% for the previous year. Positive and strong growth is forecast for the continent in 2012, at an expected rate of 5.8%.
Okonjo-Iweala is the best candidate whose experience is equally fitting to the challenge and her leadership has been exemplary for many Africans and others. She has been noted by many observers as having a unifying approach by having Nigeria and South Africa supporting her candidacy. She has a vast pool of knowledge and extensive experience in global financial matters. She was educated at Harvard University and has a PhD in Regional Economics and Development from the Massachusetts Institute of Technology (MIT). Okonjo-Iweala has an understanding of the World Bank where she was MD from 2007 to 2011 and has served her country, twice as foreign minister and currently as finance minister.
The Nigerian minister’s tenacity and understanding of both diplomatic and economic processes was brilliantly highlighted when she led a team to the Paris Club negotiations where she successfully negotiated that the group of bilateral creditors (Paris Club) pay a portion of Nigeria’s external debt (US $12bn) in return for an $18bn debt write-off. With 20 years experience at the World Bank and in President Obasanjo’s cabinet as an advisor, Okonjo-Iweala is suited for the task of transforming the bank’s image and positioning globally.
For the global tax and development agenda, her appointment would be ideal. African tax authorities would welcome the presence of someone who understands and drives the domestic resource mobilisation agenda on the continent. The challenges of development are related to the spending of public funds through the collection of taxes. The African Tax Administration Forum (ATAF) is at the forefront of promoting revenue collection improvements in Africa as well as dealing with issues of tax avoidance and evasion through practices such as Transfer Pricing.
Okonjo-Iweala serves on the Advisory Board of Global Financial Integrity and contributed to a report entitled “illicit Financial Flows from developing countries: 2002-2006” published by the GFI. Illicit financial flows are harmful to the development of the continent and require specialist and technical astuteness to overcome. Her understanding of such matters is an advantage to Africa and the rest of the developing world.
The appointment of an African to the presidency of the World Bank would change the face of international economic and political affairs. It would signal a new era in the quest to diminish the north-south divide and it would give greater importance to tackling some of the issues on the continent and generally in the developing world through the skill and leadership of a person who has a firsthand understanding of them.
African countries should support her candidacy. They should be brave enough to act in their own interests and not pander to the charms and alms of the developed world.
Logan Wort is Executive Secretary of ATAF (African Tax Administration Forum). This article was first published on atafblog.files.wordpress.com It is published here with permission.