Africa Must Diversify to Create More Jobs, Says Okonjo-Iweala

Africa showed great unity in backing one candidate for World Bank presidency

African countries should rebuild fiscal buffers as shield from possible downturn

Continent should cut commodity reliance, diversify to boost inclusive growth

Despite an unsuccessful bid for the World Bank’s presidency, Nigeria’s charismatic finance minister has much to celebrate. She is a leading light in Africa and her country’s economy has been powering ahead at around 7 percent over the last three years.

In an interview with IMF Survey online, Okonjo-Iweala explains how her country has achieved this impressive economic performance, and what policies African countries should pursue to achieve solid and inclusive growth.

IMF Survey online: Many Africans were very disappointed by the fact that you were not selected as the new president of the World Bank. What are you going to do to try and ensure a greater voice in the selection process the next time around?

Okonjo-Iweala: I know there might be a little tinge of disappointment, but actually many people are elated. Yes, Africans would have loved it, but they also recognize that the continent has achieved a great deal.

I went into this with the support of our leaders. They actually asked me to and they were very steadfast in their decisions. Africa showed unity. All the countries were supporting the same goal for the first time. It was amazing.

If another similar issue ever comes around, we will have shown that we can do it. We have opened a door. The process for selecting the World Bank president can never be the same again. Everybody acknowledges that.

Next time around, it is going to be a different, more open process, and maybe another African can go for it.

IMF Survey online: Africa is not immune from a downturn in the global economy and, especially not, from a renewed crisis in the euro area. What should Africa’s priority be to protect itself from a possible downturn?

Okonjo-Iweala: Firstly, I think African countries will need to cushion their economy. After 2008, most countries depleted their buffers. There are many types of policy buffers such as reducing taxes and so on.

Countries put them in place in order to make food cheaper or cushion people. By phasing out subsidies in good times, the savings generated can be used in a downturn. This is what we did in Nigeria.

The amount of fiscal space left, for many countries, to take those measures is now limited. We now need to look, with the help of...