Why needs may not succeed, World Bank

Etim Imisim
This Day (Lagos)
March 24, 2004

The World Bank has released two summaries of its president’s visit last week to Nigeria and West Africa. James Wolfensohn was in the country to assess what prospects the new National Economic Empowerment and Development Strategy has for the people.

He attended the summit of Economic Community of West African States Ghana, where ECOWAS was piecing together fragments of economies of member states, ravaged by conflicts and mismanagement.

In the reports, released at the weekend, Wolfensohn described the future of the region as “fragile”. But he saw hope in NEEDS, which he enthusiastically approved and pledged support for. He also praised the team President Obasanjo has put together to manage NEEDS, led by finance minister and bank’s former vice president, Dr. Ngozi Okonjo-Iweala and Prof. Charles Soludo, chief economic adviser to the president.

Conflicting images of present despair and future hope thus flashed through the highly humane bank chief’s mind over the national and conditions reginal he saw. These made him wish, as many are doing, that Nigeria will not only turn its economy around. It will create wealth for itself and bring prosperity to the continent.

“If Nigeria succeeds, as I expect and hope it will, then that will change the face of Africa,” Wolfensohn said.

The World Bank president was obviously banking on NEEDS. Sub-Saharan Africa is the only region of the world lacking behind UN Millennium Development Goals. Economic growth in West Africa in the last three years averaged 2.5 per cent. Over half its population lives in abject poverty. Life expectancy is less than 50 years. And about an equal number of the population can not read or write.

As for Nigeria, over 80 million of the population lives in poverty. More than one third have no access to clean water. Infant and maternal mortality rates are among Africa’s highest.

It is against this dark cloud that Wolfensohn – and the Nigerian government – are presenting NEEDS. The package will raise the country’s economic growth rate to 7 percent by 2007. It will increase adult literacy from 57 per cent to 65 per cent.

Also, NEEDS will increase adult literacy from 57 percent to 65 percent and cut HIV prevalence rates.

These targets are possible. The problem is that Wolfensohn also said that Nigeria is a cesspool of corruption. Citing Transparency International’s rating, he said Nigeria is the second most corrupt country in the world. He likened it to a cancer patient, who pretends the disease is not there. But the tumour is nevertheless spreading round the whole, and the man dies.

“Corruption is a cancer in the country. You can pretend to live with cancer, but it kills you.”

This is what the man said to the Nigerian government officials, National Assembly members, private sector leaders and civil society organizations whom he met. According to one of the reports released at the weekend, he spoke about the need to curb corruption in Nigeria “in all his meetings” in the country.

Wolfensohn’s statements are not ambiguous. Therefore, his position should not be. Clearly, it is difficult to reconcile his enthusiasm for an economic miracle occurring when massive mismanagement of resources and an alarming political corruption continue. In other words, the bank is saying that it cannot have real faith in NEEDS, unless the extremely high level of corrupt practices it claims is going on now in Nigeria is brought under control.

In fact, Wolfensohn has put the cost of corruption to Nigeria’s development at the same scale as the devastation caused by wars and civil strifes in the rest of the subregion. In 1999 alone, West Africa lost $800 to conflicts and wars.

Also, what is coming to be known as the bank’s view of corruption is against NEEDS succeeding in the present dispensation.

The World Bank believes corruption is a major cause of political instability. More than this, it sees corruption as the biggest single obstacle to development, and does not believe any serious social or economic progress is possible where corruption is pervasive.

Corruption distorts the rule of law and weakens the foundation on which economic growth depends. The bank’s mission is poverty alleviation. But corruption is hardest on the poor. It sabotages policies and programmes that aim to reduce poverty.

Corruption used to be treated largely as a political issue until 1996 when the bank introduced its anti-corruption manual and firmly made it an economic crime.

TI, which designed the bank’s anti-corruption package, is launching its “Global Corruption Report 2004” tomorrow at Terrace Court in London. It will also publish its national integrity index, where Nigeria and 23 other countries are under scrutiny with political corruption as its special focus.

The following countries are also covered: Armenia, Australia, Bangladesh, India, Jamaica, Kenya, Malawi, Malaysia, Mauritius, Mozambique, New Zealand, Pakistan, Papua New Guinea, Sierra Leone, South Africa, Sri Lanka, Tanzania, The Gambia, Uganda, United Kingdom, Zambia and Zimbabwe, as well as a composite Caribbean study.

The case of the biggest fraud in the bank’s history was determined January in a district court in Sweden. It was a bribery case involving two individuals who misused trust funds meant, of course, for poor countries. The bank had in 2000 fired three of its own staff connected with the case and, when the verdict was delivered this year, it welcomed it “as a clear warning” against corruption.

This month, the bank formally reopened a corruption investigation against a leading Canadian engineering company, Acres International, which was convicted in the high court of Lesotho over multibillion-dollar bribery charges. The bank’s $155 million was a part of the Lesotho Highlands Water Project, a series of dams to give water to South Africa and electricity to Lesotho.

Investigations by This Day reveal that the bank has supported over 600 anticorruption and governance initiatives in member countries since 1996.

So when Wolfensohn last week called for “a national change of heart” in Nigeria over corruption, he was asking all sectors of society to be mobilised to fight corruption.

Investigations by This Day further revealed that the bank created an anticorruption blueprint created for the Obasanjo’s new administration in 1999, which was to have been implementated in March 2000. But it has largely been abandoned by the Nigerian government.

The World Bank controls corruption in its corporate and client country projects. The bank’s anticorruption campaigns had five key elements. One, increase in political accountability. Two, recruiting and strengthening the capacity of civil society to fight corruption. Three, creating competition in the private sector. Four, empowering institutions of governance to exercise restraints on power. And five, improving management of the public sector.

In the design, all stakeholders in good governance were to be a part of the campaign. Groups that can mediate between the government and the people were to be involved. Citizen groups, nongovernmental organizations, trade unions, business associations, think tanks, academia, religious organizations and the media had important roles to play.

The banks said last week also it had expanded its operations in the country under the civilian government. It has committed $1.1 billion to a variety of projects since the return of democracy in 1999. This makes “its lending programme in Nigeria one of the fastest-growing programmes in Africa,” it said.

The bank said four years ago that it was tying lending to good governance. The question is: Why is the bank advancing any money to Nigeria, when the country has proved to be an unworthy partner in good governance?

It is not as if the bank is in doubt about its claim that Nigeria is corrupt. The country now tends to wear a universal aura of corruption. Other international sources say so. For example, Antonio Maria Costa, Executive Director of the UN Office on Drugs and Crime, reported that Nigeria has lost over $5 billion in the last few years to corrupt practices.

Under Obasanjo, Nigeria’s external reserves have sometimes been working like the hour glass. For example, until a month or so ago, they were plummeting as quick as the tide of crude oil prices rose.

By end of 2003, they fell as low as $5 billion. This made Nigeria stand out as the only major oil producing and exporting country with significantly decreasing reserves in the last few years when international market prices of oil have been increasing. This was an issue Ms. World Bank’s Victoria Kwakwa raised at the Third Yearly Monetary Policy Conference organized by the Central Bank of Nigeria. The government has as yet not given an explanation.

President Obasanjo is now enjoying nearly three times what his predecessor had in oil windfall. In the last five years, his government has been raking in an average of $26 per barrel when General Abdulsalami Abubakar worked only with $9. Throughout Obasanjo’s second or third coming, it has been the rise and rise of crude oil prices.

And all this happened when President Obasanjo woke up at New Year and introduced fuel tax. It was at a time Nigerians expected him to put funds into the production sector, expecially what this reporter calls frontier industries like waste management and tourism.

TI is working to bring about accountability in Africa.

It has called on African heads of state and government to sign two anticorruption protocols. These are African Union Convention on Preventing and Combating Corruption and the United Nations Convention against Corruption. This was during African Union’s two-day summit at Syrte in Libya last month.

As at January, a large swathe of African countries were yet to sign the two instruments. Only 21 countries, including Nigeria, had signed the AU’s. Others are Algeria, Benin, Burundi, Democratic Republic of Congo, The Gambia, Ghana, Guinea, Kenya, Liberia, Libya, Mali, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Sierra Leone, Tanzania, Togo, Uganda, and Zimbabwe.

But no country had as then ratified the regional and international treaties. But treaties’ implementation at national level is key to the success of New Partnership for Africa’s Development’s African Peer Review Mechanism (APRM) process.

The AU instrument needs 15 ratifications, and UN’s 30, to come into force. The two conventions were adopted July 2003 and the UN December 2003, respectively.

The minimum NEPAD needs to succeed is good governance, a term Obasanjo taught Nigerians during his civil society days.

As former TI’s council chairman, and sitting NEPAD chairman, the President should be an apostle, not acolyte, of good governance.

Categories: Africa, Nigeria, Odious Debts

Tagged as:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s