Jakarta, 31 January 2008, to her native Nigeria, World Bank Group Managing Director Dr. Ngozi Okonjo-Iweala is a symbol of good governance and new beginnings. Her time in office as Nigeria’s Finance Minister and Foreign Affairs Minister signified the start of numerous key reforms which have led to greater transparency, more prudent fiscal policy, and greater growth in general. Her time in Indonesia, reminds us that Indonesia and Nigeria are both resource-rich nations that have been crippled by corruption, and are now in the throes of major offensives to tackle corruption.

During her one-day visit to Jakarta, Dr. Ngozi was invited by the Indonesian Council on World Affairs to share her country’s experience in reducing poverty and attaining economic growth through good governance. Dr. Ngozi joined the Nigerian cabinet in 2003 when former president Olusegun Obasanjo began embarking on a major economic reform program.

“The overall goal was to promote private sector development as a vehicle for wealth creation and poverty reduction,” said Dr. Ngozi before an audience of former diplomats, academicians and journalists. State-owned enterprises in industries like telecommunications, petrochemicals and hotels were privatized and went from making loss to making profit. Key sectors were deregulated and suddenly became attractive to the private sector. The results have been fruitful, says Dr. Ngozi. “The telecommunications sector for example, has seen over US$ 1 billion a year in investments over the past four years. Nigeria went from having just 500,000 telephone lines in 2001 to over 32 million GSM lines in 2007.”

In line with making structural changes, the Nigeria administration took a close look at where corruption was undermining public sector performance. Through close scrutiny, it was discovered that public procurement was one of the greatest problem areas. According to a federal government survey, prior to 1999 the Nigeria had lost an average of about US$ 300 million each year from corrupt practices in public procurement. These included contract mark-ups, contracts for projects that never existed, and shifting public funds to foreign banks. This review of the public procurement system led to the introduction of due process, which calls for open tender for all government contracts. Approval is now needed for any project exceeding US$ 400,000. And finally, all completed projects must be certified before final contract payments are made. The due process mechanism too, has produced fruitful results. “The federal government has saved about US$ 1.5 billion since 2001,” Dr. Ngozi proudly reports.

Like Indonesia, Nigeria has made prosecuting high-level officials a key element in its fight against corruption. Two agencies have been instituted to crack down on the domestic business environment: the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and other Related Offenses Commission (ICPC). The two agencies have worked swiftly and indiscriminately. “Many advance-fee fraud kingpins have been detained, two judges have been sacked and two others suspended, several legislators including a past senate president have lost their posts and are being prosecuted, three ministers have been dismissed and three former state governors have been impeached,” said Dr. Ngozi. “An inspector General of Police, the highest ranking police officer in the country was arrested on corruption charges, tried and jailed.”

Nigeria’s governance reforms have in turn helped make the country more attractive to investors. Survey data from Kaufman et al (2005) indicates that perceived corruption by Nigerian firms has dropped in terms of obtaining trade permits, paying taxes, procurement and money laundering. The World Bank Group’s own Doing Business 2008 report ranks Nigeria at 108 out of 178 countries in the ease of doing business, and sees the country making great strides in reforms to make starting up a new business easier.

Dr. Ngozi ended her tenure in Nigerian public office in August 2006. Prior to her ministerial career, Dr. Ngozi was a vice president and corporate secretary in the World Bank Group. She recently attended the UN Convention on Anti-Corruption conference in Bali, in her new capacity as Managing Director to the World Bank Group. She was appointed to the position in October 2007 by World Bank President Robert Zoellick.