Wednesday, July 23, 2014

Nigeria’s self-inflicted poverty

Nigeria has been aptly described as a rich-poor country. That is a country that is well-endowed, well-resourced and blessed but grossly underutilises or wrongly utilises her potential. Indeed, had the country got her acts together, she would not have had any pact with poverty. Nigeria’s successive leadership has failed to harness her potentials for national development. What has been happening is that personal aggrandisement, ethnic consideration, religious affiliation, political leaning, and other primordial sentiments have been allowed to becloud our sense of nationhood. Self-interest or at best class interest rather than national interest has been the basis of governance. When I consider how blessed Nigeria is in terms of human and material resources, I shed tears for the underdevelopment in which we have had to wallow. All the indices of a failed state are present in Nigeria. Decaying infrastructure, insecurity, corruption, high mortality rate, soaring unemployment and grinding poverty.
God in His infinite mercy gives us a good tropical climate, benign weather condition, arable land, oil and gas, solid mineral resources as well as intelligent and brilliant people, yet, what do we see? Maladministration and bad governance. This newspaper’s editorial of March 27, 2014, titled, “Irresponsible neglect of solid minerals”, is very didactic and a pointer to our self-inflicted poverty. I crave your indulgence to quote copiously from the editorial:
“It is one of the sad paradoxes of the Nigerian story that the country is so richly blessed with minerals, but has, for four decades, neglected them all to rely almost exclusively on oil and gas for external revenues. Several years ago, research had shown that scores of mineral types were available across the country and that all the 36 states and the Federal Capital Territory hosted at least one or more mineral types. Indeed, the then Ministry of Solid Minerals and the Raw Materials Research and Development Council did extensive work to prepare 34 mineral types ready for immediate exploitation. And under Oby Ezekwesili as minister, a globally acclaimed Mining Cadastre Office was set up and investors from around the world were preparing to move in, only for the minister to be redeployed. The “Nigerian factor” ensured that the efforts went down the drain as her successors were totally uninterested in taking the programme to the next level.”
The editorial stated further: “Today, mining contributes 0.3 per cent of the Gross Domestic Product, much lower than the 3-5 per cent the International Monetary Fund says Nigeria can achieve with the right policies….At independence in 1960, it contributed one per cent to the GDP. Solid minerals exploitation had started in 1903 even before amalgamation and tin, coal, columbite, bauxite and lead were exported. The cities of Jos and Enugu sprang up as the nexus of tin and coal mining respectively. Coal production reached 574,758 tons by 1960. The Bureau of Public Enterprises, the privatisation agency, projected that mining could create about one million new jobs, earn foreign exchange for the country, provide extra tax revenues, stimulate manufacturing and wean the country off its dependence on oil and gas.”
The editorial asserted that, “…34 mineral types are sitting under the ground, spread across 450 locations nationwide, with no state left out. A National Bureau of Statistics survey found that only 13 of the identified minerals were already being mined. It identified five opportunities derivable from mining, namely exports and use in local industries; new industrial and downstream products; massive job creation; technology and skills transfer, and development of infrastructure.”
According to a February 2012 KPMG report on Nigeria’s mining sector, “There are over 40 different types of minerals spread across the country, including gold, barite, bentonite, limestone, coal, bitumen, iron ore, tantalite / columbite, lead/zinc, barites, gemstones, granite, marble, gypsum, talc, iron ore, lead, lithium, silver, etc.” The report stated ipso facto that Nigerian coal has been found suitable for boiler fuel, production of high caloric gas, domestic heating, briquettes, formed coke and the manufacture of a wide range of chemicals including waxes, resins, adhesives and dyes. The largest and purest deposits of limestone are found in the South-West and Middle Belt regions of the country. Limestone in the South-West region of Nigeria has been estimated at 31 million tones. Most limestone mining activities are mainly for cement production.The preliminary exploration and identification of deposits which are still ongoing have confirmed 10 sites to be holding reserves of over 50,000 ounces of high quality gold.”
The aforementioned KPMG report identified four key challenges plaguing the Nigerian mining sector. These are poor project funding, infrastructural deficit, insecurity, as well as illegal mining and community challenges. The report observed that, “Due to the long period of inactivity and the slow implementation of the Federal Government’s reform agenda in the sector, multinational corporations have been reluctant to fund major mining projects in the country.” It further opined that the infrastructural imbalance within Nigeria, particularly, inadequate electricity supply, and lack of access roads to sites of mineral deposits present serious challenges. The issue of insecurity needs no long elucidation. Who will want to invest in a country under serious siege of terrorism and insurgency? KPMG further notes that, “There are pockets of Illegal mining activities in some of the regions, with the attendant risks and community challenges.” Successive governments have been losing huge revenue to these unscrupulous miners, the same way the activities of illegal oil bunkerers have been denying government sizeable revenue.   In addition to the above, the fact that mining is on the Exclusive Legislative List, which makes it a federal concern, is also unhelpful.
I couldn’t agree more with the laudable recommendations of The PUNCH in the aforementioned editorial. The newspaper listed among others the need for the government to come up with “a comprehensive policy framework that will facilitate massive private domestic and foreign investment.” It advised further that efforts should be made to woo the American, Australian, Canadian, South African and Korean investors and proposed amendment of the 1999 Constitution to allow states to control their own minerals and reduce the destructive dependence on oil. Beyond these, government needs to wage a serious war against the illegal miners, reduce the cost of doing business in Nigeria by providing the social infrastructure such as electricity and good transport networks (e.g. roads and rail services) to link these mineral sites, simplify licensing procedures and improve on the poor security situation in the country.