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Reforming the Unreformable

Reforming the Unreformable: Lessons from Nigeria

Ngozi Okonjo-Iweala
Copyright Date: 2012
Published by: MIT Press
Pages: 216
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  • Book Info
    Reforming the Unreformable
    Book Description:

    Corrupt, mismanaged, and seemingly hopeless: that's how the international community viewed Nigeria in the early 2000s. Then Nigeria implemented a sweeping set of economic and political changes and began to reform the unreformable. This book tells the story of how a dedicated and politically committed team of reformers set out to fix a series of broken institutions, and in the process repositioned Nigeria's economy in ways that helped create a more diversified springboard for steadier long-term growth. The author, Harvard- and MIT-trained economist Ngozi Okonjo-Iweala, currently Nigeria's Coordinating Minister for the Economy and Minister of Finance and formerly Managing Director of the World Bank, was a crucial player in her country's economic reforms. In Nigeria's Debt Management Office and later as minister of finance, she spearheaded negotiations with the Paris Club of Creditors that led to the cancellation of sixty percent of Nigeria's external debt. Reforming the Unreformable offers an insider's view of those debt negotiations; it also details the fight against corruption and the struggle to implement a series of macroeconomic and structural reforms. Nigeria's efforts can be viewed as a laboratory for other countries--not just resource-rich developing countries like Nigeria, but any country interested in reining in debt, managing volatility, saving for the future, or building credibility with debtors and investors. This story of development economics in action, written from the front lines of economic reform in Africa, offers a unique perspective on the complex and uncertain global economic environment.

    eISBN: 978-0-262-30547-1
    Subjects: Business, History

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
  5. 1 Setting the Stage for Reform
    (pp. 1-18)

    How do people called upon to reform the economy of their country and manage a turn-around begin? Where should they turn for guidance? Although many economics textbooks devote pages to the theoretical aspects of reform, there are no guidebooks, manuals, or toolkits on the process of designing and implementing an economic reform program in a difficult low-income country, such as my home country of Nigeria. Even if there were manuals or toolkits, countries’ economic and political circumstances and other “deep fundamentals” such as cultures and ethnic and religious makeups can differ greatly, so that guides that might apply in one...

  6. 2 Advancing Macroeconomic Reforms
    (pp. 19-34)

    On the morning of July 17, 2003, I sat down at my desk in Nigeria’s Ministry of Finance, just after being sworn in with other ministers by President Olusegun Obasanjo as a member of the cabinet. I was overwhelmed when I reviewed the enormity of the problems confronting the country and saw the huge mountain of files already stacked for action on my desk. I wondered where to begin, and whether I had in fact been insane, as many friends and family thought, to leave my comfortable job and recent promotion to vice president at the World Bank to accept...

  7. 3 Promoting Privatization, Deregulation, and Liberalization
    (pp. 35-50)

    Although successful macroeconomic stabilization was necessary to restore economic growth, it was not sufficient. To get to the 7 percent per year growth rate targeted in NEEDS and sustain it, we needed to complement macroeconomic stabilization with a set of microeconomic reforms designed to change the direction and structure of the economy and lay the basis for longer-term growth. We focused on sectors and areas that our analysis showed were large drains on public finances or were blocking private-sector activity and in which economic activity tended to be marred by corruption and the role of the state was a hindrance...

  8. 4 Launching Other Structural Reforms
    (pp. 51-80)

    In addition to the structural reforms revolving around privatization, deregulation, and liberalization, we undertook parallel reforms in three main areas: civil service; trade, tariffs, and customs; and banking.

    Civil-service reform was needed if we were to implement our daunting development program for the country. Preserving the government bureaucracy had become the main purpose of the budget, rather than investing in infrastructure and improved service delivery for the population. That had to change.

    We also needed to tackle economic inefficiencies and corruption surrounding trade, tariffs, and customs. Failure to do so would mean that businesses might still be unable to expand...

  9. 5 Fighting Corruption
    (pp. 81-94)

    By the time we began the economic reform program, Nigeria had become virtually synonymous with the word “corruption.” Unless we found a way to confront corruption and enhance transparency in our economic and social life in a consistent manner, we would not be able to convince Nigerians or the world that we were serious about reform. We had to move quickly, and we had to move far beyond generalities and platitudes. We needed to understand the corrosive nature of the corrupt acts being perpetrated, pinpoint which ones had the biggest impacts on the public finances or on institutions in the...

  10. 6 Obtaining Debt Relief
    (pp. 95-118)

    Debt relief was central to Nigeria’s reform effort. Not only did it give the country breathing room to pursue other reforms; it also put it on a more sustainable footing for the future. The results were far better than anyone might have expected: a 60 percent write-off on Nigeria’s official government (Paris Club) debt. What were the ingredients in this remarkable success, and how can the lessons be applied to other countries or similar campaigns? This chapter traces the background, issues, and elements that led to this success, including the roles played by various parties, among them representatives of civil...

  11. 7 Reflections on the Reforms and Lessons for Reformers
    (pp. 119-132)

    Eight years after the reforms were launched, there is enough distance and sense of perspective to reflect on some fundamental questions: What worked well and what didn’t? What could we have done better? What are the lessons learned for the future? I am reflecting on these questions at the very time of another momentous change in my life: my acceptance of the request by President Goodluck Jonathan to resign my job as Managing Director at the World Bank in Washington and return to Nigeria to lead a second round of reforms. If I am to do this again, it must...

  12. 8 Conclusions and a Look Forward
    (pp. 133-144)

    The implementation of reforms in the second Obasanjo administration (2003–2007) broke a cycle of despair and cynicism among Nigerians about the prospects and future of their country. It showed that it is possible to bring about change, that there are Nigerians selfless enough to do this without sinking into corruption or personal gain, and that indeed it is possible to reform this hitherto unreformable country.

    But did the reforms launch Nigeria on a path of sustainable growth and development? The jury is still out. Nigeria has certainly been growing at a respectable 7 percent average annual rate since the...

  13. Appendix: Figures and Tables
    (pp. 145-180)
  14. Notes
    (pp. 181-184)
  15. References
    (pp. 185-188)
  16. About the Author
    (pp. 189-190)
  17. Index
    (pp. 191-198)