By Joe Brock
ABUJA, Aug 11 – Nigeria’s Central Bank Governor Lamido Sanusi and former World Bank chief Ngozi Okonjo-Iweala will spearhead the immediate future of Africa’s third-largest economy, but how they deal with tensions between them will determine their success.Okonjo-Iweala is expected to arrive this month to take the role of Coordinating Minister for the Economy and Minister of Finance, an expanded version of the role she held between 2003 and 2006 when she successfully secured Nigerian debt relief.
Sources close to the process say she negotiated clear terms on which she would be willing to return to serve in government, including being given broad powers over economic management and freedom from political meddling.
She is a big personality, well respected internationally and her appointment was met with widespread optimism from foreign investors, diplomats and Nigerians, but Sanusi has an equally impressive profile.
Sanusi has spread his remit well beyond the fundamental role of the central bank, raising his public profile and laying out a blueprint for reforming the Nigerian financial system, an area Okonjo-Iweala will be wanting a strong hand in.
“It will be an interesting dynamic as they are both very strong characters,” said Kayode Akindele, partner at Lagos-based advisory firm JMH-TIA Capital.
“The central bank has encroached on areas that have traditionally been the remit of the ministry of finance since Sanusi became governor and Okonjo-Iweala will want to take back the initiative in those areas.”
Since taking over office two years ago Sanusi was named central bank governor of the year by The Banker and was listed in Time magazine as one of the most influential people of 2011.
Okonjo-Iweala has her own high-profile awards, named one of the world’s hundred most powerful women by Forbes in 2006.
A month after taking office Sanusi sacked the heads of nine banks in an unprecedented $4 billion bailout. The banks were deemed to be so badly capitalised they posed a risk to sub-Saharan Africa’s second-largest economy.
In his latest bold move, Sanusi supported the nationalisation of three Nigerian banks last week, well before a recapitalisation deadline of September 30 set by the central bank and before the arrival of Okonjo-Iweala.
BANK NATIONALISATION
The pre-emptive move has been supported by economists and market sources, who see it as bringing the banking crisis closer to a conclusion, but has also prompted a terrible week for banking stocks, although a feared run on the banks has not materialised.
Source: Reuters Africa newsletter
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