Wednesday, June 19, 2019

Okonjo-Iweala: Nigeria must eradicate poverty

Okonjo-Iweala: Nigeria must eradicate poverty
April 29
16:27 2016

Ngozi Okonjo-Iweala, former minister of finance and coordinating minister for the economy, says Nigeria and the rest of the Africa must eradicate poverty to end instability.

Speaking in an interview with Le Monde, a French newspaper, Okonjo-Iweala spoke on subjects ranging from climate change to development, economic aid and real jobs for the people of Africa.

Okonjo-Iweala said it is imperative to reform tax systems to increase domestic revenue, even if the international financial system and the private sector would help in meeting the global development goals.

Excerpts below:

Q: This mobilization of international finance for development, can it succeed without this double contribution, public and private?

No! One source will absolutely not be sufficient to fund the ODD. It must be a combination of public, private contributions and interventions of international finance.

If there are so many actors of multilateralism – World Bank, EBRD, African Development Bank, etc. – it is because the international community recognizes that multilateral banks have an important role to play. They have a dual mission. The first is to increase their own funding: they have announced that in the next three years, they would inject $ 400 billion. The second is to use the money to attract thousands of billions of dollars from the private sector.

Q: Major economies emerging in Africa, Asia, Latin America. North-South inequalities remain one of the main challenges of financing for development?

Inequality is still a major problem in today’s world. Inequalities within countries, between rich, poor and middle class. And inequalities between countries, between those who are getting richer and those who are lagging behind in development.

The goal of SDO is really to find an answer to this critical question. If we fail to eradicate poverty, we are not going to end situations of instability. Nigeria has increased quite rapidly this decade, but inequalities are growing too. We must build a better growth. This is what economists claim as Thomas Piketty or Joseph Stiglitz. How to move towards a better, more inclusive world, do not let anyone remain on the roadside.

Q: How to move precisely to this company more “inclusive”?

By encouraging the growth of sectors that create jobs. In Africa, people do not want donations or even state aid. For them, the most important thing is to find a real job.

To improve the quality of growth, we must turn to the most promising sectors. To the agricultural sector for example. But not subsistence farming, modern agriculture, high value added. This is also true for the industrial sector. It is impossible to consider economic development without wave of industrialization. We cannot all export, it must also develop the domestic market to create sustainable jobs.

Q: UN negotiations are based on the principle of “common but differentiated responsibility”, which requires an extra effort from developed countries. Is this a good prism to address these problems?

Each of us has a responsibility. The states of the South, who have the responsibility to find new domestic resources to finance ODD. Northern donors have a responsibility. Many of them have promised to allocate 0.7% of their gross national income to official development assistance (ODA) and have not honored this promise, except the United Kingdom and the Scandinavian countries. France, in particular, must make an effort to increase its ODA level, which is currently only 0.36%.

Q: What arguments could convince developed countries to increase official aid?

These are not the African countries that have asked to make such a commitment. It is not for us to convince them to do more in terms of ADP; it is for them to respect their promise! They must be up for several reasons.

The first is related to climate change, which requires a global responsibility. If you do not take the necessary steps, you will be hit by the effects of global warming. Some countries are faced with large pollution problems. But the pollution of air or water are not contained in one place, they cross borders. The question also applies to health.


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