By Udeme Clement

As the former World Bank managing director, Mrs Ngozi Okonjo-Iweala, took over the finance ministry, expectations are high. While some financial experts say that the minister should focus on curtailing fiscal rascality, where government spends money without tangible projects to grow the economy, others believe she should concentrate on job creation and macro-economic stability.

The experts are unanimous that the minister must ensure due process in the release of public funds, government’s spending and must check inflation of contracts and abandonment of projects after money had been released. The finance minister, they say should put measures in place to curtail money laundering and capital flight.

Nigerians expect Okonjo-Iweala to bring her experience to bear in restructuring the financial sector to enhance rapid economic growth and development.

The ex-World Bank chief held the finance portfolio from 2003 to 2006 and successfully secured debt relief for the country. Now investors and financial analysts are watching to see how the minister, with a new National Economic Management Team of 24 members, would function alongside the governor of Central Bank of Nigeria (CBN) Lamido Sanusi and other reformers in the country.

In her acceptance speech, the former World Bank boss said government must make fundamental changes to diversify the economy into non-oil export sector, in order to reduce over-reliance on crude oil as the major source of revenue generation, even as she said that her policy framework would pave the way for relative full employment in the economy.

Stakeholders who spoke with Sunday Business expressed their views:

The minister should focus on job creation to boost Gross Domestic Product- An entrepreneur: Silas Igwe: Her financial policies and macro-economic models should reflect economic framework capable of maximising outputs to boost GDP. For instance, the GDP growth estimates have been put at more than seven percent for 2011, but most of the population lives on less than $2 a day and the oil industry provides few meaningful jobs for locals, while a lot of people, especially youths, are not meaningfully employed.

The new minister should create jobs not just by opening new windows of employment generation but by creating enabling environment for Small and Medium Enterprises,SMEs, to thrive. This would help the economy as young people would be encouraged to manage small- scale businesses to create more jobs, instead of being job- seekers.

Okonjo-Iweala should curtail government excesses- Professor Fabio Canova, a financial expert and Senior economist from University Pompeu Fabra, Barcelona , Spain: She has the experience to turn around the nation’s economy by checking government’s financial excesses.

Also, monetary policy formulators within the economic team working with her should be acquainted with appropriate macroeconomic modelling and forecasting techniques needed to stimulate growth and development of the financial sector and the economy at large.

Economic growth and development could be achieved through effective macroeconomic policies formulation and application aimed at transforming various sectors of the economy for greater productivity. Given certain limitations, it is vital that some intelligent value judgment based on knowledge of the unquantifiable variables and considerations of other non-economic factors be brought to bear on the results obtained from the models before the final formulation of socio-economic policies.

It is imperative for the new team to appreciate the intuition behind emerging tools of economic analysis and in particular to be able to evaluate the forecasts generated there from.

The minister should adopt macro-economic models capable of describing the workings of the economy to enhance greater productivity- Director-General, West African Institute for Financial and Economic Management (WAIFEM), Professor Akpan Ekpo: At present, modern policy analysis in the financial sector has shifted to the use of Dynamic Stochastic General Equilibrium (DSGE) models. The minister should adopt macroeconomic models capable of describing the workings of the economy to enhance greater productivity in the economy.

This would specify the relationships among aggregate economic variables to enhance holistic growth in other sectors of the economy. For monetary policy formulators, it is important to bear in mind that macroeconomic models suffer from important limitations. Apart from the strong simplifying assumptions usually made, their major limitations involve weak microeconomic foundations, difficulty in obtaining reliable and consistent time series data, influence of modeller’s perception of the working of the economy and absence of distributional considerations in the evaluation of the effectiveness of policy changes.

She must work hand-in-hand with CBN to stabilise the financial sector: Mark Iloh, Registrar, International Logistics and Administration: The finance minister is coming at the time three commercial banks had just been nationalised.

This is an opportunity for her to work alongside the apex bank to protect depositors’ funds. Nationalisation is the process by which the government of a country takes over the ownership and management of and industry or some banks from private individuals by bringing them under exclusive control. So, it is not something people should panic about.

The initiative by the apex bank to nationalise the banks would protect depositors fund because the companies are brought under direct state control and ownership to ensure economic stability. Also, with Iweala taking over the finance ministry, shareholders of affected banks have nothing to worry about.