Nigeria’s president, Umaru Musa Yar’ Adua, has strong views on the subject of African renaissance. Some 50 years of post-independence failure in Africa have provided tough but effective schooling for governments on the subject of policy reform. That is why experts believe mistakes made in the last commodities boom will not be repeated in the current upturn. But good governance is critical and it is essential to get all the key points of a governance agenda in place as missing one of them will destroy the entire programme. Mr Yar’ Adua says: “Africa is moving on. It is positioning itself to confront the challenges by putting in place structures that will ensure the generation of wealth and income distribution and that will address poverty and disease.” One of the reasons for optimism, he says, is that in the past 50 years, since most African nations became independent, there has never been peace and stability. Africa’s governments and institutions are now working hard to ensure there is sustained peace and stability in the continent. “Without political stability and without peace you cannot have an environment conducive to growth: we are working hard to ensure wars become a thing of the past,” says Mr Yar’ Adua.

As the first civilian leader to have taken over from another following last April’s election, Mr Yar’ Adua is able to talk about governance with some authority. Previously as governor for Katsina State, he was among only a handful of Nigerian governors who publicly declared their assets before being sworn in. But managing a country of 130 million during an oil boom will still provide huge challenges. Nigeria has been used before by academics to show how oil wealth can be misused and actually reverse the development process.

Advertisement

In Davos, various theories for the current improvements in African governance were examined. Ideas that it is due to the spread of democracy or the impact of policy conditionality linked to aid programmes were rejected. The most plausible explanation is that governments have learned by their mistakes and are avoiding actions that would lead to particularly bad outcomes.

It was also agreed that African governments had done the easy part, creating basic macroeconomic stability. African countries could not grow properly without substantial investment in infrastructure, an area that is a magnet for corruption. “In Nigeria we have taken measures to ensure macroeconomic stability. We had a commodities boom in the 1970s and know how we behaved and what the consequences were. We are behaving differently with the current commodities boom by putting in place instruments to channel the boom into economic growth,” he says.

Investment needed

Nigeria is growing at about 6% to 7% each year but Mr Yar’ Adua thinks that a rate of 13% is necessary to raise incomes to a level that overcomes poverty. One factor mitigating against Nigeria is the dearth of infrastructure in critical areas such as power and transport. Also needed is investment in education.

But ensuring good governance can be tricky. Experts have identified five key decision points that need to be part of a solid governance agenda. The problem is that unless all five are in place, the results do not come through. With commodities, these points are: how the rights are sold; how the revenues are taxed; whether the revenues are reported transparently; whether the money is saved; and whether the savings are invested properly.

Mr Yar’ Adua knows that he has to both unlock Nigeria’s oil wealth and use it prudently if the story of today’s commodities boom is to be different from the one in the 1970s. He wants to restructure operations of the Nigerian national oil company to make it more transparent and allow it to raise its own funds on the capital markets rather than relying on government. The president is adamant that the private sector, not the government, will be the engine of growth in the country. “There is this impression overseas that Nigeria has oil and is a wealthy nation,” he says. “It’s not true. We have the potential to be wealthy.”

 

CURRICULUM VITAE

UMARU MUSA YAR’ADUA

2007

Government of Nigeria

President

1999

Katsina State

Governor

1994

Katsina State Investment and Property Development Company

Chairman