* Former World Bank MD part of core reform hopes
* Vested interests could hamper power, finance plans
* President’s hands tied on some cabinet decisions
By Joe Brock
ABUJA, July 20 (Reuters) - Nigerian President Goodluck Jonathan’s largely uninspiring cabinet reflects a political compromise that will make the job of transforming Africa’s most populous nation much tougher for the core of reformers he has chosen.
Jonathan has made a series of pledges since he was sworn in for his first full term on May 29, after winning what observers said were the fairest elections Africa’s most populous nation has held since the end of military rule in 1999.
He needs a stellar team to come good on his promises to boost job creation, unlock the world’s eighth-largest gas reserves and turnaround the abysmal state of the electric power sector, a major brake on sub-Saharan Africa’s second-largest economy.
Jonathan had to carefully balance his ministerial choices around geographical and ethnic groups and reward those who helped him during a fiercely contested election period.
The retention of many ministers with poor records and some controversial appointments left few spaces for genuine reformers, although the inclusion of former World Bank Managing Director Ngozi Okonjo-Iweala was met with widespread optimism.
Okonjo-Iweala is expected to become Coordinating Minister for the Economy and Minister of Finance, an expanded version of the role she held between 2003 and 2006 when she successfully negotiated Nigerian debt relief.
During her screening by lawmakers she was quick to highlight the need to trim the cost of government, which has been a concern for economists and investors. Recurrent expenditure accounts for well over half of government spending despite poor public services.
A strong finance minister could be the catalyst for reform in a country that faces corruption challenges, an economy over reliant on commodity exports and fiscal transparency concerns.
“She delivered on a landmark debt deal last time which is a great achievement but her challenge now will be to prove herself on the domestic level, which could be a greater challenge,” said Antony Goldman, Nigeria expert and head of PM Consulting.
One of the president’s highest priority sectors will be run by new power minister Bart Nnaji, who was in charge of the power sector prior to the elections as the head of the presidential power task force.
Nigeria has a population of around 150 million and vast natural gas reserves, but mismanagement, low investment and a lack of maintenance at power stations deprive most people of any electricity.
Governments have promised for decades to fix the problem, but powerful vested interests, including officials controlling contracts, powerful unions and billionaire tycoons who import diesel and generators, have held back progress.
“I’ve no doubt he understands the power industry and has the capacity to run it but whether he can put together the team to change the whole behaviour of Nigerian culture will be a huge challenge,” said Bismark Rewane of Lagos-based Financial Derivatives.
Other cabinet choices have been less well received.
Diezani Alison-Madueke was retained as oil minister despite criticism from the Nigerian press about a lack of transparency on oil deals. An action group is seeking an injunction against her re-appointment because it says she didn’t complete national service.
However, she has always had the steadfast support of the presidency and has laid out ambitious plans to overhaul the energy industry, boost gas production and diversify exploration in poorer northern areas of the country.
Yusuf Suleiman was involved in graft allegations in a previous tenure but kept a ministerial spot, although he was switched to minister of sport from his previous transport post.
Former finance minister Olusegun Aganga has effectively been given a demotion to the role of trade and investment minister. He has come under fire over his legitimacy as a candidate because some groups say he doesn’t originate from Lagos, despite being put forward as the state’s representative.
“There are definitely choices which raised a few eyebrows and others which raise doubts about the integrity and transparency of some members of the team,” Rewane said.
Jonathan did not have a free hand when picking his team of more than 40 ministers. He was constitutionally bound to select a minister from each state to reflect the national character.
He also had debts to pay after fighting a tough campaign, first in his controversial bid in ruling party primaries and then in a general election which threatened to widen religious divides in Africa’s most populous nation.
“Nigeria has a system which lends itself to a cabinet that is a political compromise ... It is a presidential system and while the cabinet may not be inspiring, key members can be influential,” Goldman said.
Editing by Giles Elgood