Growth of Our Economy Is Insufficient to Eradicate Poverty – Okonjo-Iweala

The Minister of Finance, Ngozi Okonjo-Iweala, has given a sensible view of the national economy on December 9, 2013, Monday. The Minister said growth has mostly benefited the rich and failed to generate enough jobs.

The Minister revealed to a forum of business leaders, held at a Lagos hotel ballroom that the country’s economy likely grew at 6.7 percent in 2013, in line with the seven percent average over the last decade.

“It is clear that the top five to 10 percent is capturing most of whatever growth there is and people at the bottom are being left behind,” said the former managing director at the World Bank.

She further noted an estimated 1.6 million jobs were generated over the last 12 months but that this was an inadequate number in the country of roughly 170 million people.

“I think we need to grow at least nine to 10 percent (per year) to drive the job growth the way we want,” Ngozi Okonjo-Iweala said.

The audience included executives from a range of sectors, including Africa’s richest man, Aliko Dangote.

“People in this room: if we don’t put our minds to this problem, that we need to create jobs and not just create wealth, you’ll find that the whole economy may be in danger,” she said.

However, the Minister of Finance and others have warned against taking too much comfort in a GDP figure which fails to tell the real story of Nigeria’s economy.

“There is no-one glorifying GDP growth,” she said.

Okonjo-Iweala further revealed to the business leaders that President Goodluck Jonathan had a road map for “redistributing” some of the nation’s wealth.

These include government grants to kick-start small businesses and an aggressive commitment to agriculture, widely recognised as the key sector in terms of employment and alleviating poverty.

But government needs more revenue to meet its growing obligations, Okonjo-Iweala said, and the focus must be in “non-oil sectors”.

Improved revenue collection is a top priority for Jonathan’s government, the minister said, noting that “75 percent of registered businesses do not pay taxes”.

With its huge consumer base, many foreign firms have identified Nigeria as an attractive market for potential investment.

Ultimately for the internationally-respected economist, Nigeria needs to become an easier place to do business.

“We have to improve our bureaucracy at all levels,” Okonjo-Iweala said.

AFP