Speaking on “inequality, growth and resilience,” at George Washington University, the two-time finance minister said the World Bank and the International Monetary Fund (IMF) must seek means to embed savings in national constitutions devoid of political manipulations.
Okonjo-Iweala added that Nigeria was able to save $22 billion under former President Olusegun Obasanjo, which saved the country in 2008, when there was global economic meltdown.
Speaking on the Chilean saving example, Okonjo-Iweala said: “We tried it in Nigeria, we put in an oil price based fiscal rule in 2004 and it worked very well.
“We saved $22 billion because the political will to do it was there. And when the 2008 /2009 crisis came, we were able to draw on those savings precisely to issue about a 5 percent of GDP fiscal stimulus to the economy and we never had to come to the bank or the fund.
“This time around and this is the key now, you need not only need to have the instrument but you also need the political will. In my second time as a finance minister, from 2011 to 2015, we had the instrument, we had the means, we had done it before, but zero political will.
“So we were not able to save when we should have. That is why you find that Nigeria is now in the situation it is in. Along with so many other countries.”
On solving the problem of political will and political manipulations, she said: “That is the question that I ask, what do we need to do to these countries to save over a period of long accelerated growth.
“We need to devise mechanisms not just that are good technically but find a way to either embed them in the constitution or find a way to separate them from the political manipulation so that these countries can survive over time.
“To build resilience, African countries need tools, mechanisms and it is doable and we need to interrogate ourselves why we have not done it.”
She added that manufacturing was also critical to growth in Nigeria and the rest of Africa, quoting manufacturing as just 11 percent of GDP in Africa, and nine percent in Nigeria.
“I do not believe that we can be resilient, except if we can encourage manufacturing even on the goods we consume, services, entertainment industry, agriculture.
“I think these are the kinds of questions that policy makers struggle with on a daily basis and that is what we are going to answer to get resilience.