How to diversify the economy for inclusive growth

As the Coronavirus (COVID-19) pandemic takes its toll on the economy, people, institutions and organisations, the Buhari administration must think out of the box for a way out of the quagmire. This is not the time to hold tightly onto old stereotypes about north and south; who should not touch what resource and who has right over what.

COVID-19 is a non-shooting war on people and the economy. It manifests the same way as a shooting war – reduced income, unemployment, hunger, starvation, malnutrition and death. The way a shooting war is confronted frontally is the way COVID-19 should be tackled. Unrelenting thinking that makes for right decisions and actions is imperative. The wealth of resources of Nigeria constitutes a veritable weapon to fight the recession.

Nigeria is endowed with abundant natural resources ranked among the highest in the world. The resources can broadly be classified into land resources – natural gas, petroleum, coal, tin and columbite, iron ore, uranium, limestone, lead, zinc, ignite, salt, marble, gold, etc; forest resources – wild game animals, palm oil, palm wine, rubber, timber, cocoa, firewood, fruits, a rich agricultural land for cultivation of high yielding cash crops; water resources – fish and a host of aquatic resources. The human resource element, consisting of a vibrant youthful population, is equally remarkable.

While petroleum is the most popular in terms of exploitation and revenue generation, the other equally important resources are either neglected or ‘illegally’ exploited in a haphazard manner. Nigerians have no business being poor or the country being among the world’s underdeveloped. The world is scandalised that Nigeria is classified as the poverty capital of the world. The ill-conceived structure of resource management, exploitation and control is at the root of mass poverty and national underdevelopment. The people are alienated from their land that bears their resources.

While oil and gas account for about 35 per cent of the country’s Gross Domestic Product (GDP), petroleum alone accounts for about 90 per cent of the total export revenue earnings. Virtually all the money used in the country comes from oil. The other resources contribute little or nothing to national income. The expectation that Nigeria would be a great nation has not materialised. Rather than being great, the country and majority of its people, practically, wallow in poverty and underdevelopment. It is a pathetic irony of fate. The way out is to change the framework for harnessing the resources by letting the people play active parts.

Every individual, village, town, local government and state in Nigeria is supposed to be an active player in the management, exploitation and use of the God-given resources. The resources are natural endowments meant for the people. The people have the inalienable right to it for livelihood. There is no village or community in Nigeria that has no natural resource endowment that its people can depend on for livelihood and national development. But when the people are alienated from their land, which is their life, they have nothing left, hence, mass poverty and discontent. The first issue has to do with resource ownership. There are different kinds of resource ownership regimes, which include state, private, common, non-common and hybrid ownership. Who owns the resource, or the kind and right of stakeholders, is what determines the approach adopted in the management.

State property regime applies when resources are owned and controlled by the state, such that individuals or groups can only make use of it with the permission of the state. Private property refers to a resource that is owned by a defined individual or corporate entity. A common resource is when it is owned by a group, which could be an indigenous tribe, village or community. A non-common or open-access resource has no definite ownership. The hybrid ownership regime applies to resources that contain elements of one or two other ownership regimes.

In Nigeria, the law confers ownership of all mineral resources on the Federal Government. The Land Use Act of 1978 confers ownership of the real estate to the states. The implication is that only the government has the power to exploit resources while the people are alienated. People feel cheated and marginalised. The discontent leads to agitation for equity and justice, vandalisation and in extreme cases, militancy and restiveness. There can be no peace or progress in the circumstances. Not even any development project sited in the community soothes the anger. The skewed resource ownership regime in favour of the Federal Government constitutes a serious obstacle to national development. Not even the states are allowed to exploit the mineral resources in their domain. They go ‘cap in hand’ to the Federal Government for handouts. This forms the basis for the heightened call for restructuring.

The first step towards ensuring inclusiveness in resource management in the country is to remove the legal strictures that make it impossible for people to utilise their God-given resources. Communities and states should manage the resources in their domain with Federal Government control of standards. Once the law is changed, each of the 774 local government councils in the country has got at least one or two mineral resources to tap to the advantage of the people in the locality, state and country at large. The idea of local content and economic diversification are meaningless when the people are alienated from their land and contribute nothing to national development. Local content presumes that the people have access to their land resources and are able to contribute to national development by the value-added from their resources. Only then, also, can we talk of diversification of the economy.

The next critical issue is human resource. Nigeria’s education curriculum is not tailored to solve the country’s problems. It is still colonial white-collar-job oriented. Nigeria’s education should be totally changed and tailored to the needs of the country. Schools in the Niger Delta should produce graduates in oil prospecting, refining, marketing, pollution control, etc. The ones in South-East and South-West should produce graduates in coal mining, coal thermal energy systems, gold mining, cement production, erosion control, etc. Those in the North should produce graduate engineers in iron mining, tin mining, uranium mining, desertification control, reforestation management, etc. Nigeria’s poverty tag is artificially induced because the people are contributing virtually nothing to economic development. That is why everyone waits on the government to do every, while the people are on the receiving end only. Nigeria cannot make progress until this ill-advised structural framework is discarded and a vibrant progressive model adopted.