Diversification, states and their mineral resources
As the former Minister of Mines and Steel Development, Dr. Kayode Fayemi, who is now the Governor of Ekiti State, declared, unequivocally, that state governments are free to explore and exploit mineral deposits in their domain. That was cheery news that excited many Nigerians who desire unfettered development for the country but are disappointed by the repressive constitutional strictures that have, for decades, kept Nigeria napping over her abundant mineral wealth.
There is need to revisit this nagging issue in view of the clamour for diversification of the economy, especially, amid the crash in oil revenue following the corona virus outbreak. Was Dr. Fayemi making a frivolous statement? Or, was he stating the obvious? If the latter was the case, why are the states not taking action in that direction? And why has Dr. Fayemi not taken the lead now that he is governor for others to follow? The issue of states exploiting their mineral resources is not as simple as portrayed by the former minister when the obnoxious constitutional provisions are still intact.
Dr. Kayode made the declaration while hosting officials of the Lagos State Government in Abuja. The former Lagos State Commissioner for Energy and Mineral Resources, Mr. Wale Oluwo, led a team of his state officials to the minister to present some requests to the Federal Government pertaining to the mineral resources of Lagos State.
Olowu told the minister that his state has limestone, silica, clay and a few other minerals in commercial quantity. According to him, estimates put the limestone in the region at12 million metric tons around Epe; silica sand of up to 200 billion cubic metric tons around Ibeju-Lekki area and clay of about 180 billion cubic metric tons around Lagos East. He noted that the state has been carrying out geological surveys to obtain key data on the minerals.
While acknowledging that the Federal Government has exclusive rights over minerals, Dr. Kayode pointed out that the constitution encourages states to either set up their own investment corporations or partner with private investors to exploit the minerals in their domain, “provided they go about such in a legal manner that will not interfere with locations already given to other stakeholders before application comes from the state.” That is the problem. If the states have right over their mineral resources, why should there be other stakeholders not approved by the states?
Was Dr. Kayode saying that states have to apply for approval from the Federal Government to be able to exploit their mineral resources? If that is the case, there would be encumbrances, given the nepotism, favoritism, cronyism and corruption in the system. If we go that way, only states, indeed, governors, in the good book of the Federal Government would be granted approval while those in the opposition won’t. As a matter of fact, that will create tension in the polity.
Former President Olusegun Obasanjo, it would be recalled, refused to release the allocations of the Lagos State Government during his tenure because the state governor, Bola Ahmed Tinubu, was not in his good book. Things don’t just work straight like that in Nigeria. If Dr. Kayode was genuinely desirous of lifting the constitutional restrictions on mineral resources, he ought to have gone a step further to push for the abrogation of the law.
Ideally, every state should own its mineral resources without having to apply to the Federal Government for permission. Dr. Kayode should have pushed for an executive bill to be sent to the National Assembly to abrogate the constitutional provisions that gave exclusive rights on minerals to the Federal Government. The right environment should be created, legally, before states could have unfettered access to their mineral resources.
How does this apply to oil resources? Like other minerals, oil resources should belong to the states in whose domain they are found. As Dr. Kayode rightly pointed out, the states will then pay royalties to the Federal Government. This, absolutely, is the way to go in a federal system that Nigeria parades. The burden of catering for the states has to be removed from the Federal Government. The states should leverage through the exploitation of their mineral resources.
Certainly, Dr. Kayode said what many people would like to hear. And, whether or not he was flying a kite, the truth remains that the mass poverty and underdevelopment quagmire in the land are self inflicted, which is an embarrassment. It is pertinent to ask why only Dr. Kayode revealed this truth now.
Why have the state governments, over the years, not been able to unravel the constitutional provision that allows them to exploit their mineral resources irrespective of the Federal Government’s exclusive rights over such? Why are the states indifferent while illegal miners feast on the minerals? Why is attention focused only on oil with its attendant mismanagement and corruption? The ball is in the court of Dr. Kayode, as governor of Ekiti State, to avail himself with the constitutional provision. He should exploit the mineral resources in Ekiti State.
One way to curb indolence is to stop the monthly allocation in Abuja and let the states cater for themselves using the resources in their domain. Dr. Kayode would have etched his name on gold if, as Minister of Mines, he lifted the veil off the face of state governments and paved the way for them to exploit their mineral resources. That alone, would have made a historic change in Nigeria’s political economy.
At present, the country is facing an economic emergency. Coming at a time when the country is in dire straits as a result of the drastic fall in crude oil prices, there is no doubt that both the states and the Federal Government have been hit by the crisis, which warrants inward looking. It is senseless for Nigeria to be caught in the web of global oil downturn when there are numerous alternative resources to leverage on. Let the mineral wealth be opened up.
Nowadays, across the states, many government workers are owed salaries. Many states are unable to meet other basic statutory needs. The Federal Government is not earning more revenue as the price of oil plummets to around $20 per barrel. There are fears that the oil price may fall to as low as $10 per barrel. Given the crises around the corner and manipulations on oil, Nigeria should brace for the worst case scenario. The country must diversify or suffer the consequences. What would the country do? Governments would be in hot soup, as the entire budget projections for 2020 look like a mirage.
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