Okri's novel is about a young boy who is, in certain African religious traditions, a spirit child who has decided to finally live in the real world, rather than be born, die, and return to the spirit world. However, this boy never fully separates from the spirit realm into the real world, the result of which is that he can see and is influenced by all manner of spirit creatures (from ghosts to really strange humanoid beings to manifestations of nature's spirits).
For me, this is very clearly a fantasy. The elements are all there. As far as I know, the novel does not posit that the boy is delusional, but takes very seriously the fact that he is a spirit child. In saying it's fantasy, however, I'm not at all saying that it isn't something else too. My friend, however, thinks that the label somehow leaves out those other elements (and he did, at one point, cite things like politics, etc. as part of what gets left out of the fantasy label).
For me, however, the label "fantasy" encompasses a wide range of fantastic literatures and can include all manner of plot elements, whether they be political or romantic. Fantasy isn't reductive, for me, because when we say "this is fantasy," we're not saying that the novel is only about dragons or spirits or the fantastic, just that an element, or the prime component, of that novel allows it to fit within the fantasy genre. I see fantasy as a very wide and open genre, stretching from literary to pulpy, Tolkien-esque to urban, etc.
So, I'm going to ask you. Do you think that labeling things as fantasy is reductive? Could the same argument be made about science fiction, romance, mystery, etc.? Let me know in the comments!