World Bank Approves $200m Loan for Lagos State Reforms

           Ms. Marie-Francoise Marie-Nelly

 The World Bank group has approved $200m credit to Lagos State to support a range of reforms in regards to fiscal sustainability, budget planning, budget execution and the investment climate in the state.

 A statement issued by World bank on Wednesday said the facility would help sustain the state’s recent economic growth and poverty reduction, while delivering social services to the expanding population.

 The funds from the International Development Association segment of the World Bank Group supports the Third Lagos State Development Policy Operation and is the last of a series of two development policy operations, which aim to improve public finances and investments in a fiscally sustainable manner.

 The bank said that Lagos State has achieved significant economic growth, improved its infrastructure and services, significantly reduced crime, and brought millions of people out of poverty within the last 10 years.

The World Bank Task Team Leader for the project, Jariya Hoffman, said:

“The operation’s focus on furthering improvements in the transparency of the budget system, effectiveness of public expenditures, and the business climate will help sustain the pace of economic growth and thus the state’s positive momentum towards income equality and the delivery of public services,” he said.

 The World Bank Country Director for Nigeria, Marie-Francoise Marie-Nelly, said,

“This operation is designed to assist Lagos State in its quest to continue its recent success in spite of the challenges brought on by rapid economic and population growth.

“As an urban agglomeration that has reduced income inequality during double digit economic growth, Lagos is an example of inclusive growth in Nigeria. If the Lagos experience is sustained, there is strong potential for this type of inclusive growth to spread to other parts of Nigeria.”

 According to the bank, the operation will improve the state government’s fiscal sustainability by anchoring the budget on a framework that accounts for key fiscal risks and improves revenue collection. Support for adopting a new approach to budget planning and preparation will ensure adequate allocation of budgetary resources to social services such as education and health.

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Okonjo-Iweala, World Bank, Nigeria and implications of a minister’s exit

The ongoing move to secure the World Bank presidency for Dr Ngozi Okonjo-Iweala is another glowing attainment of Nigeria on the international stage. What is worrying many within the administration, however, is that her exit might harm and derail the Goodluck Jonathan Presidency with respect to the current deep-rooted reforms of the nation‘s economy.

The Coordinating Minister of the Economy, as a reputed technocrat, is, within the administration, loved and hated by several interests. Her image is worrisome to many feeding fat from the status quo ante.Her firmness generates stepping on toes and her prying into many shady sectors of the economy is said to be discomforting to establishment actors. The minister‘s constant moves to tame parasites within the economy constantly meet brick walls with only presidential backing as her saving grace.

In the cut-throat world of power politics, the technocrat is caught in the web of interplay among desperately acquisitive forces. By constantly freezing shady accounts and vetting many agencies’ accounts through world-renowned audit firms, the coordinating minister is also said to incur expressed and suppressed anger and revulsion of many influential forces. Across the public service, ‘the madam’ is almost enemy number one for her insistence on due process, cost-saving programmes and continuous rigorous slashing of recurrent expenditure of government.

Since her appointment, the woman, believed to be the most plotted against minister, remains the headgear technocrat. From within and outside, many loathed her for many reasons. To the civil society groups, she is an agent of Western financial institutions mandated to subjugate Nigeria‘s economy to Western world. From the fuel subsidy saga to several high profile controversial government policies, Dr. Okonjo-Iweala remains most of the time the sacrificial lamb. Even for policy areas not under her purview, she is the fall guy.

To many within the National Assembly, she is to be blamed for non-implementation of budget as passed. She is the minister with so many frequent invitations to the National Assembly, leading hours of questioning and arguments. Even when her actions are backed up with relevant approvals, only few honorable and distinguished senators admitted her seriousness in confronting the many national economic malaise facing the nation. Her belt tightening proposal is a challenge to those who needs slush fund to oil the national political machine.

To some of her colleagues in the Federal Executive Council, her nomenclature as the coordinating minister for the economy is a source of constant headache, jeolousy and intrigues. Being the first minister in Nigerian history to be so conferred with the task of coordinating her colleagues and vetting their project proposals, the job has not been smooth-sailing for the woman who is now a veteran of public sector intrigues in Nigeria. Grumblings and deliberate sabotage at times featured with presidential voice and superior economic logic being her defence.

Hence within the executive ministerial caucus, she is not fully loved or hated. Within the public bureaucracy, she is classed as a restrictive low spender. For the National Assembly, Dr Iweala is possibly a stumbling block in fund withholding and all other tough cash flowing restriction practices .To the civil society, the minister is a symbol of Bretton woods institutions armed with such programmes as public sector downsizing, subsidy rationalization, wage freeze, among others. To the contracting community, the drive for sanitization of the procurement system is worrisome as over bloated contract and other sharp practices may soon be blocked.

But for President Goodluck Jonathan, the madam is a pillar of national economic reforms, hence her conferment with unprecedented presidential support. In hard tough areas, presidential approvals assisted in dismantling entrenched cabals. Such approvals gave births to the auditing of the public pension system long before the scandal became a public knowledge. Others include deep cut in budgets of many ministries and the hard push to reduce deficit financing, port reforms and very excellent coordination with likeminded technocrats within the government.

So far, recurrent expenditure, deficit financing, debt management, public procurement reforms, subsidy management and many others are been addressed in a manner many observers concede are in line with international best practices. The advances are however coming at a cost, a factor which many observers felt may have motivated ongoing drive for her to move back to the World Bank.

Confronted with so many opposition on a job so central to the economic revival of the nation, Iweala‘s personal progress is now set against national interest. While the administration has thrown its weight behind her, there are reservations in many quarters as to what will happen if she finally quits. Breaking off the helmsman at this critical point, many felt may disrupt the pace of economic reforms. Some even hold the extreme view that those who want the president to fail are behind the push to ease out Iweala.

Okonjo-Iweala‘s exit may mean the abolition of the position of coordinating minister which has reduced the political elasticity in the management of the public purse. There may be a return to the old semi-rule of the thumb and a gradual relaxation of the shutdown of leakages in the system. Diverted by 2015 politics, Mr President may fall prey to economic predators that may advance succession politics for a rethinking of fiscal restraints among others.Managment of economy may relapse to politics as a guiding rule rather than the increasing dominance of sound economic principle in public finance.

Okonjo-Iweala‘s exit is thus seen among puritan observers as a likely positive advancement for her but a grave setback for the nation. The World Bank presidency has all what it takes in material and political rewards for the holder of the office. Never will she again be subjected to attacks from interest group if she secures that office. Her life will no longer be a subject of debates and attacks from rivals in power game. Interestingly she probably felt Nigerians do not appreciate her, considering the very many opposition to her.

If truly the administration wants her to go, many political pundits here in Abuja regard such turn of event as a signal that the battle for 2015 has commenced. The removal of a fiscal brake in an otherwise corrupt and loose economy is sure invitation to political contractors that the game is on.

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