Fallacy of natural resources BY Olugbenga Jaiyesimi

Natural resources

Natural resources

FILE

WHEN discussing restructuring of the Nigerian polity and making the case for fiscal federalism, it is postulated that all states or regions have resources governors can fall back on rather than go cap in hand to Abuja.

Resource control has also been the focus of agitation by a region of the country. This resource debate goes beyond Nigeria as discussants question Africa remaining poor despite having over 30% of the world’s mineral and natural resources. They claim Africa is being raped or drained of its resources.

However, a resource remains inanimate until an inventor finds a use for it. The copper in Zambia, the uranium in Niger or the coltan in the Congo would have been of little value to the peoples of these countries without the inventors. Same for the Niger Deltans, most of whom would have remained contented fishermen to this day. The parable of Jesus easily comes to mind, the talents (read resources) were taken from the steward, who kept it in the ground, and given to stewards who multiplied theirs. Africans give their primary resources to those who know how to add value to them, be it the copper ore for electric wiring or uranium to electricity, it’s biblical. In Nigeria’s case, we give others our crude oil and collect premium motor spirit from them.

The intuitive thinking is that being resource endowed automatically translates into societal riches. We hold on to these views despite what real life tells us that mineral resources do not equate to societal wealth in this new world. We have the phrase ‘resource curse’ yet we choose resources. We have heard that winning the resource lottery assigns nations to poverty yet we choose resource endowment as a reason for restructuring the polity into regions.

Those who pass on the cliche of regional resources replacing the allocation from the federation account never give details of how the tin in Jos or the bitumen in Ondo or the gold in Osun and Zamfara states will suffice. Nigeria has had a federal ministry of solid minerals for 37 years yet how many industries has it birthed?

Resource endowment also attracts conflicts of which Nigeria has had its fair share, the Niger Delta crisis and, lately, the crisis in Zamfara State. We are aware of the Blood Diamonds of Sierra Leone and the perennial conflicts over minerals in the Democratic Republic of the Congo. In addition, we have environmental degradation and poisoning of locals through contaminants getting into the food chain or water table.

We misapplied David Ricardo’s theory of comparative advantage that has determined how Nigeria engages in international trade, basing our trade on our natural resources only. The West had a perceived advantage in growing cocoa so we exported cocoa beans and built Cocoa House. The North had an advantage in groundnuts so groundnut pyramids gave us Ahmadu Bello University. The East had advantage in palm kernel and palm oil and Nigeria was number one and two respectively. But, how come Cadbury Nigeria is buying cocoa products from India? I don’t see India’s comparative advantage over Nigeria. What comparative advantage has Singapore such that they have multiples of Nigerian installed refining capacity? Indeed smart nations had jettisoned this theory while we took it in hook, line and sinker. From this we see having a resource is not an advantage, other things come into play. An important question is: is it exploitable? Is there a growing international market for it that Nigeria has to break into? It took Nigeria longer to monetise its gas than it took to monetise oil. We have the second-largest deposit of bitumen yet we are unable to monetise it.

To help understand the fallacy of natural resources as source of societal wealth I will take us back to a December 16, 2010 article in The PUNCH by a former minister of education in the First Republic, who also served as minister of justice in the Second Republic, the late Chief Richard Akinjide, SAN. The article identified three categories of assets that contribute to societal wealth—natural assets, our bone of contention here; productive assets, that is productive capital that accumulates over time reason (Lagos State is the fifth largest economy in Africa though it’s not resource-rich); and intangible assets as represented by the quality of a society’s human resource and the worth of institutions the local HR creates and runs.He wrote that, unlike the other two assets, HR can be either an asset or a liability. Some country’s HR scored a high positive while Nigeria’s HR was given a negative 71%! It is to this liability that a smart governor of a region must tune and turn to. This is the asset that Lee Kuan Yew employed to turn Singapore into what it is today. If Osun State people are looking to their gold, I wish them the best but gold did little for Ghana. If Ondo State indigenes are looking at their bitumen, I wish them well too. The US used its positive HR to do many things including landing men on the moon. Our negative HR has made crude oil become an albatross around our necks. It has disallowed us from monetising our bitumen deposits and using it for our road construction. Alas, Nigeria imports bitumen for its roads.

I repeat, it is the entrepreneurial governor who will make a difference in a region or a state. I observed this play out in Ogun State. For much of its existence Ogun state was a civil servant state, then came an entrepreneurial governor and in a matter of years, Ogun State became the most industrialised state in the federation. His successor by commission lost this position to a neighbouring state as he sent away a major investor from the state. Ogun State also lost the proposed Catholic University in Nigeria to another state.

Why can’t Nigeria import copper ore from Zambia, or iron ore and bauxite from Guinea to have strategic industries operate from Nigeria? Our industries need not be based only on local raw materials. Mind-boggling is the lack of response to this very revealing article, a lesson in itself. For over ten years now, this diagnostic article has been ignored and the pathos continues to ravage the country. Our human resources continue to bring the country down by destroying over half of our natural assets. Indeed natural assets count for nothing without a positive human resource. And, if the day of restructuring the polity ever comes, and it will come, we will discover to our chagrin that without restructuring our minds to uplift our human capital we will be putting old wine in new wineskins.

Another cliche to get Nigeria transformed is that we should pay more attention to our human capital development. This is after growing our universities to almost two hundred, with several more polytechnics and monotechnics. If it is about the inadequacy of HCD, how is it that products from our universities are sought after all over the world?

As Chief Akinjide pointed out, the Nigerian economy is not absorbing or satisfying the aspirations of Nigerian emigres so they seek pastures elsewhere. How come we think producing more university graduates would lead to the transformation of Nigeria? Except we view our academically enhanced HR as not being for Nigeria. After all, diasporans have grown our remittances to almost match what we earn in petrodollars. Isn’t this another level of human trafficking, shipping out our human resource like was done during slavery for a few dollars more?

There is a clamour for the populace to empower themselves with voter cards and change the current guard, this is not enough. The voters have to be well informed so as not to vote in a populist over a pragmatist. The voting public is part of the negative human resource, who can be carried away by a smooth-talking demagogue who promises a stronger naira when what we need is a depreciating naira.

What we need most are philosopher-kings, who will help turn our liabilities into great assets and entrepreneurial leaders, who understand these dynamics. Currently, those aspiring to lead us to enjoy the paraphernalia of office and gift projects to communities as though financed by them and not by federal allocations. Let’s advocate mind restructuring over polity restructuring.

Dr Jaiyesimi writes from Sagamu...

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