Re-invigorating Sustainable Intra-Regional Trade and Investment:The Future of Nigeria Revenue System. Paper Prepared By ‘Yele A. Idowu, PhD, F,CFIA.
Nigeria is a nation bestowed with vast human and natural resources with oil exports accounting for about 95% of foreign-exchange income and some 80% of government income, with a population of about 200 million. Despite its enormous array of resources, the Nigerian economy has witnessed a period of stagnant economic growth. This has been partly blamed on corruption and gross mismanagement of the country’s vast resources. Corruption has tremendously affected the lives and provoked animosity amongst Nigerians. It has eaten so deep into the fabrics of the Nigerian government, the public and private sectors, governmental and non-governmental organizations and has essentially become a way of life and an important source of accumulation of private property in Nigeria (Mustapha 2008).
In Africa, about fifty of the fifty five countries are either producing or exploring for one natural resource or another. Yet, as elsewhere, the potential of these natural resources have been largely squandered. Sadly, instead of delivering a better life for the poor, it has led to an elite capture with economic and social benefits associated that only a few elite enjoy. Nigeria represents one of the groups of countries where rich natural resource deposits and rents have not translated to inclusive growth, development and a better life for the people. Since independence, Nigerians have continued to struggle with social and economic hardships occasioned among other things by bad governance, poor fiscal social contract, failed policies, corrupt political class and over reliance on natural resource (oil).
Huge oil rents as well as the recent rise in economic growth statistics have not translated into improved quality of life for Nigerians and over all national development. Presently, provision of public goods remains at the lowest level with over eighteen states of the federation struggling to finance wages, pensions and other financial obligations as the country struggles with external balance and public finance challenges resulting from falling oil price and sickening political corruption. Oil represents the life wire of the Nigerian economy. Unfortunately, the poor governance of the money spinning natural resource locates Nigeria in the narrative of the resource curse- a concept that explains the paradox of natural resource wealth not being beneficial to the general populace or economy of the resource rich country.
In Nigeria, oil money has sparked some of the biggest national corruption scandals. Unfortunately, even the return of democratic institutions and reform efforts like the Excess Crude Account, Sovereign Wealth Fund, Oil and Gas Implementation Committee of 2000, National Oil and Gas Policy 2004 and the contentious Petroleum Industry Bill (PIB) as well as transparency effort spearheaded by Nigerian Extractive Industries Transparency Initiative have had minimal impact since emphasis is more on revenue collected rather than the distribution of income and public expenditure.
As an economy, Nigeria is not exempted from problems of microeconomic stability, growth and infrastructural deficit. Oil revenue and successive oil booms have only led to wasteful spending, corruption and what many have referred to as the natural resource curse. As a federating unit, oil rents are shared between the three tiers of government (Federal government 52.68%, States- 26.72% and Local Government- 20.6%). Within this framework of revenue sharing, those in power still complain that there is inadequate funds to finance public services-education, health, and critical infrastructure. However, the Economic and Financial Crimes Commission (EFCC) on the other hand reported that just between 2009 and 2013, 0ver US $25.4 billion was siphoned out of Nigeria
One of the dangerous ills of the status quo is the poverty and widening gap of inequality between the rich and the poor. Contemporary Nigeria seems a fertile ground for popular revolt if the current inequality situation is not addressed. The conflicting position and the legal battle instituted by the state governors against the federal government have made sharing of the excess crude funds a preferred tradition. And this has reduced the capacity of the economy to withstand financial shocks resulting from falling oil prices. Furthermore, the National Assembly stance on the budget over the last years scuttled the possibility of saving. A critical examination of the impact of these natural resource governance mechanisms in Nigeria suggest that more is still left to be desired. Current national financial challenges clearly show that Nigeria is not safe with this status quo. Therefore, strengthening, reforming and reshaping the present resource governance structure while considering proposals for the future is necessary
Corruption in Nigeria, especially at the centre, is traceable to the stupendous oil wealth, mismanagement and incompetence in government. Corruption and mismanagement swallowed about 40 per cent of Nigeria’s $20 billion annual income (Ribadu, 2007). At least, 100,000 barrels (4 per cent) of national export are stolen everyday (Reuters Report, 2007)
Several variables are responsible for and cause corruption in Nigeria like other developing and developed countries. Such factors are myriad, and have political, social and cultural inclinations. By implication, the fundamental determinants of corruption vary across countries, mixing national policies, bureaucratic traditions, political development, and social history. Specifically, some evidence points to a link between corruption and social diversity, ethno-linguistic fractionalization, and the proportions of country’s population adhering to different religious traditions (Lipset and Lenz, 2000).
Thus, the following are identified:
Affluence and Undue Glorification
The brazen display of wealth by public officials, sources of which they are unable to explain, Many decorate themselves with countless traditional titles. Obsession with materialism, One of the popular, but unfortunate, indices of “good life” in Nigeria is flamboyant affluence/conspicuous consumption. Public reaction to such affluence include: “He has made it” or “he has arrived” or he has received his breakthrough, etc. No consideration to the means of “making it’, “arriving” or “breaking through”.
Wide Inequality in Income and Wealth Distribution
The social-economic divide between the rich and the poor occasioned by wide disparity in income and wealth distribution has engendered corrupt activities, especially among the youth, in an attempt to escape poverty and impoverishment and get to the “next level”. Inequality results
in hindrance to economic opportunities, lack of skills acquisition, capital, material and other resources (Lipset and Lenze, 2000). This breeds a neglect of the rule of the game (societal norms and ethical standards) and innovation of criminal tendencies to make ends meet (Dike, 2005).
Negligence of Ethical Standards
The negligence in ethical standards throughout the agencies of government and business organizations in Nigeria is a serious drawback to corrupt-free environment. The issue of ethics in public (and in private life) encompasses a broad range, including a stress on obedience to authority, on the necessity of logic in moral reasoning, and on the necessity of putting moral judgment into practice. Many public office-holders in Nigeria (appointed or elected) do not, unfortunately, have clear conceptions of the ethical demands of their position.
Weakness of Social and Government Mechanisms
In his work, Klitgaard (1988), demonstrates the relationship between culture and corruption. His means-ends scheme shows that corruption is at times a motivated behaviour responding to social pressure to violate the norms, so as to meet the set goals and objectives of a social system. This usually lead to people engaging in more corrupt behavior, knowing fully well that they would get away with it.
Inappropriate Policies and Ineffective taxing System
According to Edward (2002), bad rules and ineffective taxing system which make it difficult to track down people’s financial activities, breed corruption. Ineffective tax system is another serious problem for Nigeria. The present taxing system does not make the individual to explain his or her sources of income (or at least fully), may be through end-of-the-year income tax filing.
Peer Community and Extended Family Pressures
The influence of extended family system and pressure to meet family obligation are more in less developed societies. In this regard, Harrison (1985) acknowledges that the extended family system is an effective institution for survival, but noted that it poses a big obstacle for development. As shown by the work of Edward (1958), a strong relationship exists between corruption and strong family orientation.
Incentives and Opportunities for Corruption
Economic approaches have addressed the incentives for an official to behave corruptly. Economic approaches model the corrupt employees as a rational actor who decides whether or not to engage in corrupt activity by balancing the potential benefits against potential costs and consequences. In addition, other important characteristics that might affect the incentives for corruption have been identified to include the predictability of the judiciary, the ratio of civil service wages to manufacturing (industry) wages, and the presence of merit-based recruitment and promotion.
However, political scientists and experts in public administration have focused on institutional factors as the systemic roots of corruption. In this regard, an important characteristic of a system-enabling corruption is a divergence between the formal and informal rules governing behaviour in the public sector. Hence, World Bank (1997) observes that vast majority, if not all, of countries have rules against corruption (although not all countries have all the rules they may need), but in case of systemic corruption, formal rules become subordinate to informal rules. In this model, Klitgaard Robert (1988) captures the opportunity for corruption as follows:
C = M + D – A
Where; C is Corruption,
M is Management,
D is Discretion, and
A is Accountability.
According to this model, the opportunity for corruption (C) is a function of the size of the rents (revenue) under a public officials control (M), the discretion that the official has in allocating those rents(D), and the accountability that official faces for his or her decisions (A). Yet, other lines of research suggest a mixture of cause factors drawn from both political and economic sources. For instance, empirical study by Daniel Kaufmann and Jeffrey Sachs (1997), suggests that the determinants of corruption are complex. Poor institutions (including the rule of law and safeguards for property rights), civil liberties, governance (including the level of professionalization of the civil service), and economic policies as well as other
characteristics (including a larger country size) all seem to play.
In summary, the importance of identifying the specific determinants of corruption in a country targeted for reform has been stressed. Understanding the root causes of corruption is a crucial first step in developing policies that address the problem rather than its symptom (Nweze, 2013.This analysis becomes necessary in view of its importance as the bedrock for developing economically sustainable revenue drive for Nigeria future
Aggregated Perception of Corruption by Institution in Nigeria
SN Institution (Public) Perception of Level of Corruption
1 Political Parties 4.7
2 Police 4.7
3 Parliament/Legislature 4.2
4 Public Officials/Civil Servants 4.0
5 Judiciary 3.9
6 Education System 3.4
7 Military 3.2
8 Business/Private Sector 3.0
9 Medical & Health 3.0
10 Media 2.8
11 NGOs 2.7
12 Religious Bodies 2.4
Note: Score Scale is 1-5, where 1 means `not at all corrupt`, 5 means extremely corrupt`.
Source: Transparency International, Global Corruption Barometer 2013.
ASSET MAPPING OF ECONOMIC OPPORTUNITIES IN NIGERIA-
Years of military rule, corruption, and mismanagement have hobbled economic activity and output in Nigeria, despite the restoration of democracy and subsequent economic reform. Much like most developing countries, Nigeria faces its own share of country-specific challenges ranging from political to economic. However, the single most latently potent of these challenges emanates from the growing socioeconomic split and imbalances which characterize the geopolitical zones of the country. A comparative perusal of some indices between these zones reveals that in almost every important socioeconomic indicator, some geopolitical zones are lagging far behind others. These lopsided indices suggest that a timely and targeted economic blueprint is needed to accelerate a more geographically balanced economic growth in Nigeria. Nigeria being a resourced based economy, there is a critical need to identify, codify and better use the available resources for better planning and balanced economic development. Given the massive size of Nigeria, natural resource and agricultural products differ somewhat significantly among geographical zones. More importantly, the differences in natural endowments almost automatically bestow latent comparative advantages on each geopolitical zone. In view of these advantages, this economic blueprint would explore the possibilities of holistically harnessing all the identified resources in order to achieve maximum impact in each region.
The robust economic growth Nigeria has experienced over the past decade has not led to sufficient growth inclusiveness as poverty and unemployment remain high. Moreover there exists uneven growth and performance in key socioeconomic indicators across the geo-political zones. Several attempts have been made in the past to forcefully spur economic growth at the regional level. This requires a more innovative approach as encapsulated in this proposed project. Critical assets constitute the backbone of any country’s national existence and development. A comprehensive inventory of these assets classified into different categories needs to be kept and updated from time to time. Some of the broad categorization of such assets include infrastructural, human capital, natural resource and agricultural assets. Also, understanding the quantity and location of these assets across the six geo-political zones of the country is most useful for public and private decision-making.
Availability of this type of data holds high promise for growth improving growth strategies for the geopolitical zones through mapping of the economic opportunities presented by these assets in the formulation of critical policies and identification of investments needed to translate these economic opportunities into transformational growth. The products of this exercise will be useful for a wide range of stakeholders that include the following:
- Investment Forums: This data will become one of the main selling points for persuading foreign investors during Nigeria-focused investment forums.
- Economic Summits: Since most (if not all) geopolitical zones now have periodic economic summits, the document could be complementary to the plans that each zone may already have.
- MDAs: The holistic information generated through this intervention would become handy for relevant MDAs in planning and situating their own sectoral plans.
- Potential Investors: Both local and foreign potential investors would benefit significantly from having an organized and comprehensive body of geo-coded data showcasing national assets and associated opportunities.
- National Planning Commission: The data could be a complementary planning tool for the National Planning Commission. Aspects of the data could also serve as a baseline for the Infrastructure Master Plan.
- Others: Donor Community, job-seekers, suppliers of raw materials, beneficiaries of forward and backward linkages, etc.
Geopolitical Zones in Nigeria
The Six Geopolitical Zones in Nigeria is the division of the country into six zones which consist of states with similar cultures, history, background and close territories. These were created during the regime of President Ibrahim Badamasi Babangida.
Below is the list of the Zones and the states that fall under each of them.
- NORTH CENTRAL- (7 States) Niger, Kogi, Benue, Plateau, Nassarawa, Kwara and FCT.
- NORTH EAST- (6 States) Bauchi, Borno, Taraba, Adamawa, Gombe and Yobe.
- NORTH WEST- (7 States) Zamfara, Sokoto, Kaduna, Kebbi, Katsina, Kano and Jigawa.
- SOUTH EAST- (5 States) Enugu, Imo, Ebonyi, Abia and Anambra
- SOUTH SOUTH – (6 States) Bayelsa, Akwa Ibom, Edo, Rivers, Cross River and Delta.
- SOUTH WEST- (6 States) Oyo, Ekiti, Osun, Ondo, Lagos and Ogun.
Given the comprehensiveness of the inventory of assets and the decision support tools that will be generated, this will provide a better guide to development assistance for donor agencies and ultimately affect a balanced investment and development program in Nigeria
Like many developing nations, Nigeria has accumulated a significant foreign debt. Many of the projects financed by these debts were inefficient, bedeviled by corruption, or failed to live up to expectations. Nigeria defaulted on its debt as arrears and penalty interest accumulated and increased the size of the debt, despite her significant production and manufacturing potentials.
Petroleum plays a large role in the Nigerian economy, accounting for 40 percent of the GDP. It is the twelfth largest producer of petroleum in the world and the eighth largest exporter, and has the tenth largest proven reserves. However, due to crumbling infrastructure, ongoing civil strife in the Niger Delta—its main oil-producing region—and corruption, oil production and exports are not at full capacity.
Agriculture About 60 percent of Nigerians are employed in the agricultural sector. Agriculture used to be the principal foreign exchange earner of Nigeria. Perhaps one of the worst undesirable effects of the discovery of oil was the decline of that sector. Nigeria, which in the 1960s grew 98 percent of its own food and was a net food exporter, now must import much of the same cash crops it once exported. Agricultural products include groundnuts, palm oil, cocoa, coconut, citrus fruits, maize, millet, cassava, yams, and sugar cane. It also has a booming leather and textile industry.
Mineral resources that are present in Nigeria but not yet fully exploited are coal and tin. Other natural resources in the country include iron ore, limestone, niobium, lead, zinc, and arable land. Despite huge deposits of these natural resources, the mining industry in Nigeria is almost non-existent.
Population density Nigeria is the most populous country in Africa, with a population of close to 170 million. According to the United Nations, Nigeria has been undergoing explosive population growth and one of the highest growth and fertility rates in the world. By its projections, Nigeria will be one of the countries in the world that will account for most of the world’s total population increase by 2050. One out of every four Africans is Nigerian. Presently, Nigeria is the ninth most populous country in the world]], and even conservative estimates conclude that more than 20 percent of the world’s black population lives in Nigeria. Estimates in 2006 claimed that 42.3 percent of the population is between 0 and 14 years of age, while 54.6 percent is between 15 and 65; the birthrate is significantly higher than the death rate, at 40.4 and 16.9 per 1,000 people, respectively.
Health, health care, and general living conditions in Nigeria are poor. Life expectancy is 47 years (average male/female) and just over half the population has access to potable water and appropriate sanitation; the percentage of children under five went up between 1990 and 2003, and infant mortality is 97.1 deaths per 1,000 live births.
Education is also in a state of neglect, though after the oil boom on the oil price in the early 1970s, tertiary education was improved so it would reach every subregion of Nigeria. Education is provided free by the government, but the attendance rate for secondary education is only 29 percent (average male 32 percent/female 27 percent). The education system has been described as “dysfunctional,” largely due to decaying institutional infrastructure. More than two-thirds (68 percent) of the population is literate, and the rate for men (75.7 percent) is higher than that for women (60.6 percent).
Ethno-linguistic background Nigeria has more than 250 ethnic groups, with varying languages and customs, creating a country of rich ethnic diversity. The largest ethnic groups are the Yoruba, Fulani, Hausa, and Igbo (Ibo), accounting for 68 percent of the population; the Edo, Ijaw (ten percent), Kanuri, Ibibio, Nupe, and Tiv (27 percent); other minorities make up the rest (7 percent). The middle belt of Nigeria is known for its diversity of ethnic groups, including the Pyem, Goemai, and Kofyar. Other ethnic groups include the Ham.
The process of centralization was completed with the introduction in 1980 of the Federation Account (FA) to hold all federally collected revenue, including the 20 percent onshore mining rents and royalties hitherto conceded on the basis of derivation and inclusion of local governments in the federation account revenue sharing arrangements. The Federal government, which had become unitary in practically every sense of the word, relied on “periodic grants” or special allocations to the states.
At the geopolitical level, inequality is pronounced. The 2009 UNDP Human Development Report for Nigeria revealed wide spatial variation in GDP per capita among the geopolitical zones. The
South-South has the largest GDP per capita (USD 3 617.4), followed by North-West (USD 1 898.9), North-Central with (USD 1 320.3), South-West (USD 1 309), North-East (USD 343) and South-East (USD 292.2) per person. Noticeable regional variations exist in the number of Nigerians who live on a dollar a day. According to the 2010 Nigeria Poverty Profile, 70.4% of people live on less than a
dollar a day in the North-West, 50.1% in the South-West, 59.2% in the South-East, 59.7% in North- Central, 69.1% in North-East, and 56.1% in South-South. Conflict is both a result and a driver of regional inequalities. The lack of economic opportunities and poorly performing education and health-care systems lead to widespread dissatisfaction, which is often a precursor to conflict. Likewise, the lack of investment in conflict-affected areas serves to perpetuate regional inequalities.
If people are not working but depend on booty sharing, there cannot be increased economic activity. You cannot nurture a people on a system of booty sharing without production and expect development. This paternalistic form of federalism, which is the order of the day in Nigeria, cannot be sustained, especially with the increasing crisis and conflicts and the consequent weak naira. Hence, the leaders opened up a serious debate pointing increasingly in the direction of the demand for a thorough-going fiscal federalism, which could free up more resources for the development of the region.
Most intriguing, is the courage of the Delta State Governor, Chief James Onanefe Ibori, who initiated and spearheaded the struggle for resource control and fiscal federalism. The most precise definition of resource control is that put forward by the Southern Governors, in a communiqué from their meeting in Benin City. It read: “The practice of true federalism and natural law in which the federating units express their rights to primarily control the natural resources within their borders and make agreed contribution towards maintenance of common services of sovereign nation state to which they belong”.
In the case of Nigeria, the federating units are the 36 states and the Sovereign nation is the Federal Republic of Nigeria. The central theme of resource control as argued by the Southern Governors is that the federal system does not tolerate subordination, particularly financial subordination, which a centralized federal system has enthroned on Nigerian polity. It stands to reason therefore, that each component unit must have the power to harness its resources for its own development purposes. In other words, the federal system must emphasize the self-governing status of each component unit, and adequate provisions must be made to guarantee the economic independence of the states that make the polity.
The agitation for resource control is therefore rooted in the desire to promote the practice of fiscal federalism as the most efficient means of freeing Nigerians from the hangover of military authoritarianism and misrule. It enunciates a competitive federal system in which every component unit is able to exploit its vast economic potentials towards rapid development and progress of every section of the country.
A CASE FOR SOLID MINERAL RESOURCES REVENUE BASE:
From the Diary of Kayode Fayemi one time Minister of Solid Minerals and Governor of Ekiti State: “For years, successive administrations have talked about the need to diversify the economy, moving it away from over reliance on crude oil exports. For years, this has remained just talk rather than an urgent imperative that should drive policy-making. At the moment, the collapse of global oil prices which has led to a fiscal crisis means that governments at all levels are struggling to finance capital projects and sustain recurrent expenditure. But our reaction to these facts should not be despondency. The current convergence of adverse trends is providing us with the incentives to execute just such a shift. We may be in a season of adversity and austerity but there is also abundant opportunity. These hardships should spur us to seek innovative solutions and new ways and means of driving sustainable growth.”
The Government stated clearly that our goal is to build a more diversified economy in which oil remains important, but its share of the overall portfolio of revenue sources declines as the whole pie grows bigger. The recently approved Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) emphasizes the place of solid minerals in the economic growth strategy of the country. Our fixation on crude oil has blinded us to the immense scale of riches we have in other sectors and their potential to power a new age of economic growth.
Nigeria’s natural resource portfolio has at least 44 known mineral assets that include precious minerals, base metals, bulk minerals and what are known as rare earth minerals. More specifically, our most promising mineral assets include gold, iron ore, barite, bitumen, lead, zinc, tin and coal. Before the advent of Oil production in Nigeria, during the colonial era and up to the first decade after independence, Nigeria progressively exploit coal, iron ore, gold, or tin. The proceeds of such enterprise was put to work building some of the first public infrastructure in Nigeria, just as agricultural proceeds from cocoa was used to finance education and infrastructure in western Nigeria.
Today, however, based on current data, Nigeria’s solid minerals sector only makes up about 0.34% of gross domestic product (GDP). While that is significant, it is much smaller than its true potential as the vast majority of our mining assets have yet to be exploited. Therefore, it would be accurate to say that Nigeria’s solid minerals sector has more or less been operating sharply below capacity, with many mining operations manned by small scale artisanal miners, as opposed to the large scale actors.
According to one of the major stakeholders in the solid minerals sector, the Association of Metal Exporters of Nigeria, we can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits, with several multiplier effects on job creation, state development and social infrastructure that could position the solid minerals sector as the main catalyst for national development with tremendous efforts to shift the sector from a state-led orientation to a more efficient private sector-led sector with clear guiding laws, regulations and activities. Today we have companies such as Tongyi Allied Mining, Dangote Group, Segilola Gold, Kogi Iron Mines, Multiverse Resources, Kas Industries, and Australian Mines Ltd etc. blazing the trail in the mining sector. We also look forward to welcoming more companies into the sector.
The good news for Nigeria is that we have tremendous domestic demand for industrial minerals and metals – in the construction industry for example. Our internal challenges consist mainly of limited or inadequate infrastructure which makes it difficult for Nigeria to export iron ore for example; obsolete geological data; archaic mining techniques and processes; illegal artisanal mining activities; weak institutional capacity that has traditionally hampered my ministry’s discharge of its regulatory mandate; and insufficient funds to drive development in the sector; and the enduring perception of Nigeria as a particularly high-risk business environment. We are presently aggressively tackling all these challenges.
The outcome of this presents an opportunity for stakeholders at the regional level to cooperate in optimally exploiting their mineral resources. The sector is now fully open for new businesses while we work on strengthening a functional mineral resource development ecosystem.
The Imperative of Regional Cooperation
Why is this sector so important to our economic growth going forward? For one thing, unlike crude oil which are distributed in somewhat limited measure across our terrain, solid mineral deposits are far more evenly spread out across our country. In other words, the solid minerals sector has the potential to supply that rising economic tide that will lift all our boats. According to the resource audit findings by the National Extractive Industry Transparency Initiative (NEITI), solid mineral deposits are scattered all over Nigeria, with more deposits in certain areas than others. Over 40 million tonnes of talc deposits have been identified in Niger, Osun, Kogi, Ogun and Kaduna states. There are huge deposits of coal ranging from bituminous to lignite in the Anambra Basin of South-Eastern Nigeria. There are lead-zinc ores within the Asaba Area of Niger Delta, while tin, niobium, and lead, are to be found around Oyo and Igbeti, with as much as over a billion tonnes of gypsum spread around Sokoto, Niger, Ondo and Ekiti states.
There is ample geological evidence that confirms a truth we have always intuited – that every zone, region and state in Nigeria has something to bring to the national table of resource riches. The task now is to effectively administer them for the good of all Nigerians.
Nigeria’s Vision 20:2020
The main goal of Nigeria’s Vision 20:2020 is to improve the well-being of Nigerians. In this direction, the Vision aims to reduce the problems of hunger, poverty, poor healthcare, inadequate housing, low quality human capital, gender imbalance, low productivity and poor basic facilities by 2020. Enhance access to quality healthcare Guaranteeing the wellbeing and productivity of our people Eradicate extreme hunger and poverty Promote gender equality and empower women Improve access to micro-credit Build human capacity for sustainable livelihoods and national development Provide accessible and affordable housing Provide sustainable access to potable water and basic sanitation Foster a culture of recreation and entertainment for enhanced productivity. This will only be achievable where there is PPP. Public- Private- Partnership to enhance individual, Local Government, State, and Geopolitical zones economic revenue base
The main factors that militate against states being able to appropriate and exploit these resources are rooted in our constitutional architecture which centralizes control over subsoil resources in the federal government. Not only does this feature negate the principle of subsidiarity which would have allowed states to fully explore their economic potential; it means that there are no real incentives for states to become involved in mining because taxes and royalties do not accrue directly to states but to the federal government. This grossly limits the capacity of states to boost their internally generated revenue. There is a broad consensus that this arrangement requires reform, that would see the transfer of mines and minerals from the exclusive legislative list exclusive federal jurisdiction to the concurrent legislative list where states can exercise greater jurisdiction than is presently the case. Meanwhile and until this is achieved, states can set up mining joint ventures, special purpose vehicles that couple federal interest with private investment and regional investment concerns.
Limestone deposits occur in Cross River, Ogun, Benue, Gombe, Ebonyi, Sokoto, Edo and Kogi states;
Magnesite in Adamawa and Kebbi states;
Coal in Enugu, Imo, Kogi, Delta, Plateau, Anambra, Abia, Benue, Edo, Ondo, Bauchi, Adamawa and Kwara states;
Wolframite in Kano, Kaduna, Bauchi and Niger states; silver is found in Kano, with kyanite in Kaduna and Niger states;
Manganese in the Northern states of Kebbi, Katsina and Zamfara;
Diatomite found in Yobe State, while Ilmenite-rutile is found in Bauchi, Plateau and Kaduna states;
Fluorite is found in Taraba State:
Gold in Niger, Kebbi, Kaduna, Kogi, Kwara , Zamfara, Osun and Oyo states.
Nassarawa State in the North has been appropriately tagged as Nigeria’s home of Solid Minerals. The state is one of the most naturally endowed states in Nigeria in terms of the availability of economically and commercially viable natural resources. These include clay, columbite, ilmenite, mica, barytes, pyrite, galena, limestone, sodium chloride, ephalerite, silica sand, granites, tantalite, mica, sphalerite, talc, gemstone (tourmaline, aquamarine and sapphire), halcopyrite, topaz, cassiterite, columbite, tantalite, emerald, heliodor, amethyst, quartz, coking coal, marble, and iron ore.
Bauchi is another richly endowed state in the North with metal ores, non-metallic ores and gemstones. Other untapped mineral resources in Bauchi include kaolin, talc, tin, quartz, iron ore, gypsum, zircon, calcite, tantalite, chalcoprite, mica, copper ore, limestone, tourmaline, beryl, garnet, columbite, muscovite, aquamarine, topaz, marble, bismuth, wolfromite and others.
The distribution of mineral resources defies political boundaries. Often the occurrence of natural resource deposits cuts across state and even regional boundaries. This means that it is absolutely imperative for states to establish forums of regional cooperation in order to exploit the commercial potential of the resources in their domains. If the states with this vein are to fully benefit from their resources, they must create frameworks of regional economic cooperation and regional resource corridors. In this way, nature itself points us towards the necessity of cooperation if we are all to fully benefit from the resources she has so generously deposited in our land. Transformation can only come from a deep seated commitment to re-engaging at the regional level.
Paradigm Shift in Natural Resource Governance
The quantum of gas that is wasted could earn Nigeria more than $500 million annually. The World Bank estimates that gas flared in Nigeria is equivalent to the total annual power generation in sub-Saharan Africa whereas the same gas if properly harnessed could be used to power Nigeria and the West African sub-region. Against the background of this tragedy, ecological justice is one of the major planks of our approach to the development of the solid minerals sector. We will ensure that investors comply with global best practices in resource extraction by integrating all relevant protocols on environmental conservation in the conduct of mining and all related business. This approach is informed by our belief that the environment itself is a resource and has to be safeguarded even as we unearth its more obvious treasures.
The objective is to provide a better deal for the local communities where these minerals are located, ensuring communal buy-in and benefit. To this end, the government and the private sector will share the responsibility of investing in key drivers of success such as geosciences data that investors need. The appropriate infrastructure such as railways and bulk ports, mine security networks, specialized technical talent and top class regulatory and enforcement capacity. Government cannot do it alone. There is need for support from the grassroots and states to implement our ideas. States and local government teams need to become partners in our journey to create sustainable prosperity in Nigeria.
Natural vegetation and agricultural products: revenue resources of each geopolitical six zones of Nigeria,
In Nigeria, the leading producing states include: Niger, Kano, Jigawa, Zamfara,Kebbi, Sokoto, Katsina, Kaduna, Adamawa, Yobe, Borno, Taraba, Plateau, Nasarawa, Bauchi, and Gombe States (NAERL, 2011)
Oil Palm production, Nigeria
Oil palm in Nigeria grown in the coastal belt, which varies in depth from 100 to 150 miles, and a riverine belt which follows the valley of the Niger and Benue for a distance of 450 Miles from the sea. The main oil palm producing states are: Cross River, Akwa Ibom, Ekiti, Delta, Bayelsa, Ogun, Rivers, Anambra, Ondo, Enugu, Imo, Oyo, Abia, Edo, Ogun, with Cross River, Delta, Ondo and Edo being the highest exporters in commercial quantity
Although cocoa is mostly grown in fourteen of the Thirty-six Nigerian States, the main producing states (aside from Cross River, in the South East) are located in the South West of the country, which is the highest Cocoa producing region (80%), with most production areas located in: Ekiti, Ogun, Ondo, Osun and Edo the highest producing states in the country are : Ondo, Osun, Cross River, Ekiti, Oyo, Edo, Ogun
Bitumen / Oil Sand reserves
Bitumen was first discovered in 1900, with focused exploration beginning in 1905. Bitumen deposits are found in Lagos State, Ogun State, Ondo State, and Edo State. Conoco has performed a technical and economic evaluation of these deposits, and believes there to be over Twenty-Seven Billion barrels of oil in these tar sands and bitumen seepages
Cattle Hide and Beef
Most of Nigeria’s cattle and cattle related products is sourced from the Northern portions of the country, in states like: Adamawa, Bauchi, Gombe, Niger, Kaduna, Zamfara, Borno, Taraba, Jigawa, Kebbi and also Oyo Kwara, Nassarawa to lesser extents
Nigeria’s domestic wheat production is small at 70,000 tons in MY 2013/2014. Nigeria’s northern states of Bornu, Yobe, Jigawa, Kano, Zamfara, Katsina, Adamawa, Sokoto and Kebbi, are major wheat growing areas, where it is known by the local name “Alikama”
Production is forecast up by about 10 percent to 6.5 million tons in 2013/2014 as compared with 5.9 million tons in the season of 2012/2013. Nigeria is the largest sorghum producer in Africa, accounting for about 71 percent of the total regional sorghum output, 30-40 percent of total African production, and is the second largest world producer after the United States. Main producing states are: Zamfara, Niger, Plateau, Katsina, Kaduna, Benue, Kano, Bauchi, Borno
Nigeria ranked 16th on the global tomato production scale, accounts for 10.79 per cent of Africa’s and 1.2 per cent of total world production of tomatoes. While tomatoes are cultivated in most states in the country, Jigawa, Katsina, Zamfara, Sokoto, Kaduna, Bauchi, Gombe, Taraba, Kano lead the pack in the commercial cultivation of the crop.
Nigeria is the largest cement producer in Africa, and Ogun state has the largest concentration of limestone deposits in Nigeria especially in and around Ewekoro and Ibeshe, more than 50% the metric tonnes of cement produced locally in Nigeria, comes from Ogun . Today, Ogun state is the new Cement Capital of Africa, producing the same amount of Cement as South Africa, the continent’s second largest economy. Other important producing states are: Kogi state around Obajana, Edo state around Akoko Edo – Okpella, Cross river state around Mfamosing, and to a lesser extent Nkalagu in Enugu state and Ashaka in Gombe state
Timber and Wood products production
The major wood processing industries in Nigeria are typically large capacity facilities industry such as large sawmills, plywood mill, pulp and paper plants and quite large numbers of small scale wood products manufacturing companies such as furniture industries, cabinet makers and carpentry. Round-wood in Nigeria comes mostly from the natural high forest zone of the country, in particular from the Southern States of Nigeria, but most especially in Ondo, Cross River, Ogun, Edo, Delta Ekiti, Osun and Oyo States of Nigeria which are the largest producers. The most important wood products, produced, consumed and traded in Nigeria are sawn-wood, plywood, particle board, news-print, printing and writing paper and other paper boards
The greater part of pepper production in Nigeria is undertaken in the northern areas of the country, in Kaduna, Kano, Jigawa, Katsina, Sokoto, Plateau and Bauchi states. The natural features of these regions, especially the presence of flood-prone plains and river basins and above all the development of vast irrigated lands, create conditions that greatly favour the development of this crop
Primary belt stretches from Osun-Ondo States in the southwest to Niger, Kaduna, Zamfara, Kebbi States in the northwest. Already Ratel has a provengold reserve of over 620,000 ounces just in their Iperindo property in Osun state in addition to other exploration activities being carried out across the country
The Bulk of Nigeria’s Rubber production come from the Southern states of Delta, Edo, Ondo, Ogun, Cross River
Soybean was first introduced to Ibadan, Oyo State, Nigeria in 1908. Today, Nigeria is the largest producer of the crop for human and livestock feeds in West and Central Africa. At present, the major soybean producing states in the country are Benue, Kaduna, Taraba, Plateau and Niger in the central regions. Other growing areas include, Nasarawa, Kebbi, Kwara, Oyo, Jigawa, Borno, Bauchi, Lagos, Sokoto, Zamfara and FCT.
Maize/Corn is grown widely throughout the country. The Central states of Nigeria such as Niger, Kaduna, Taraba, Plateau, Adamawa
Cowpea is grown in Nigeria at varying degrees, but the crop seems to do best in the drier climates of the northern regions. Nigeria is the largest cowpea/pulses producer in All Africa, and the 4th largest producer in the World after India, Canada and Burma. The major growing/production areas in Nigeria are: Borno, Zamfara, Sokoto, Kano, Gombe and Yobe
Cashew/ Cashew nut production
Since 2008, Nigeria has become the largest producer of cashew nuts in the world. Nigeria was last the largest producer of cashew in 2010. Cashew nut production trends have varied over the decades. While Nigeria is the world’s 6th largest producer of cashew fruits, with annual production volume of about 120,000 tonnes. The Cashew Industry also provides about 600,000 jobs and a total annual trade worth N24billion, thus making the sector a major contributor to Nigeria’s non-oil GDP .It is widely grown in the southern states of Nigeria. Especially: Enugu, Oyo, Anambra, Kogi, Osun, Abia, Ondo, Benue, Cross River, Imo, Ekiti, Ebonyi, Kwara
Cassava (Manihot esculenta) production is vital to the economy of Nigeria as the country is the world’s largest producer of the commodity. The crop is produced in 24 of the country’s 36 states.. The average yield per hectare is 10.6 tonnes.- And it is a staple in many parts of the country. In Nigeria, cassava production is well-developed as an organized agricultural crop. It has well-established multiplication and processing techniques for food products and cattle feed. Main producing states are Imo, Ondo, Anambra, Kogi, Taraba, Cross River, Enugu, Ogun, Benue, Delta, Edo
Nigeria is by far the world’s largest producer of yams, accounting for over 70–76 percent of the world production. According to the Food and Agricultural Organization report 2008 figures, yam production in Nigeria has nearly doubled since 1985 to 37.0 million tonnes per heactre, with value equivalent of US$5.654 billion. The major yam producing states in Nigeria are: Adamawa, Benue, Cross River, Delta, Edo, Ekiti, Imo, Kaduna, Kwara, Ogun, Ondo, Osun, Oyo, and Plateau. Benue state is however the largest producer.
The findings of this research indicate that links between the tourism industry and the management authority of World Heritage properties are often weak. The private sector is almost always a player in these sites, having a vested interest in ensuring that the expectations of tourists to the site are met However, given the nature of the tourism industry, private sector involvement is often disorganized with a multitude of companies competing for the tourist dollar. Presence of industry players is most marked outside site boundaries in the form of tourism infrastructure (hotels, restaurants, bars, retail outlets etc.). Within the site, industry presence is regulated through concessions, going from operating tours, cafes, accommodation, through to providing more alternative tourist experiences such as helicopter, hot air balloon and boat rides. The management authority is responsible for the public use of the sites, managing the concessions within the site but has no control or formal influence over how tourism is managed immediately outside site boundaries.
According to tourism expert Tayo Fakiyesi, the current state of tourism in Nigeria can be
List of tourist attractions in Nigeria
There are several tourist attractions in Nigeria, each with its own uniqueness, nature, structure and historical background. This is a list of notable tourist attractions in Nigeria, arranged in alphabetical order.
· Agbokim Waterfalls
· Osun oshogbo grove
· somorika hills
In countries where workers have confidence in high-level honesty, they are more likely to speak out – and be surprised about reprisals. Publicity about such cases may then stimulate governments to pass whistleblower laws. Effective whistleblower protections must include access to the normal legal process including trial by jury, protection for the whistleblower and protection of lawful disclosure. There must be no retaliation and there must be effective resolution of the wrongdoing disclosed by the whistleblower.
Having good whistleblower laws is undoubtedly important, but so is enforcement. Failures of implementation or enforcement may undermine good laws, and there are many sceptical comments about the various avenues open to whistleblowers, from hotlines to false claims legislation. For example, Devine points out that in the US ‘between passage of the 1994 amendments and September 2002, whistleblowers lost 74 of 75 decisions on the merits at the Federal Court of Appeals, which has a monopoly on judicial review of administrative decisions’. Given that the US is in its second or third generation of whistleblower laws, the existence of scepticism about whistleblowing law effectiveness and enforcement, or about poor prospects in pursuing redress, remains an important issue (Brown & Latimer, (2008).
Further Recommendations, Tentative and Ultimate Solutions
A pessimistic intellect is a feeble one which must be renounced. Hence in agreement with Bayar’s (2003) observation, I conclude that: it is possible to combat corruption by changing incentive structures in the economy. If deep causes of the problem are analyzed carefully, a new system of governance can be established, such that, even most opportunist individuals do not find getting involved in corrupt practices profitable. In this vein and with a view to reducing corruption levels in the country, various strategies can be designed, by creating new institutional structures, improving the legal framework for fighting corruption, making state structures more efficient, re-shaping the political parties, creating, at the level of the civil society, non-governmental organizations supporting efforts against corruption, and so on.
An important role in the task of combating corruption rests with the mass-media, which, more often than not, contribute to a better transparency of decisions made at public levels. In this context, the Freedom of information Act serves as a convenient rope to launch anti-corruption crusade. Also, cultural factors, as well as mentality of Nigerians which exert a direct influence on corrupt tendency, would need to be addressed in order to transform the value system (Andrei, Matei, and Gh. Roşca 2009).
Transparency International’s recommendations are worthy of consideration, namely:
· Make integrity and trust the founding principles of public institutions and services
· Bring back the rule of law
· Hold the corrupt to account
· Clean-up democratic processes
· Give people the tools and protections to fight against corruption
A close evaluation of these suggestions cannot but lead us to their strategic implications. In particular, the points about the need to clean up the democratic processes as well as holding the corrupt to account envisage a radical managerial paradigm shift. This carries the implication of some sort of social revolution with far-reaching implications for the currently entrenched profiles of privileges and deprivations across social groups in the country. However, in the long run and in order for the country to optimise the benefits of her resource endowment, that strategic option is an inevitable one, as the foregoing sections have sought to demonstrate.
In the same vein, the following complementary and relatively more concrete and programmatic measures including some of those suggested by Coker, Ugwu and Adams (2012) should be invoked, namely:
- The immunity granted certain public officers should be removed from the Nigerian Constitution as this would largely assist the anti-corruption agencies tackle corrupt and other related vices committed by public officers now rather wait for such officers to vacate office at the end of their tenure before initiating actions against them.
- Service delivery agencies should ensure that the consumers enjoy full value of what they are paying for. In this respect, the importation of recycled or out-dated machinery, spare parts, and other equipment must be outlawed and culprit adequately penalized.
- Once a contract is awarded, it should be strictly monitored and evaluated in order to ensure that any deviation from specifications or non-performance should be adequately contained.
- The government should orientate the people to perceive corruption, not as way of our life, but as something that must be abhorred.
- The huge emoluments unilaterally fixed and claimed by legislators should be drastically reviewed downwards and replaced by a sitting allowance-based arrangement Aderemi Medupin (2016)
Liberating the shadow economy would mean opening up the South-East with maritime and allied infrastructure, giving the manufacturing hubs of Aba and Nnewi better access to internal and external markets. This would also alleviate the overconcentration of economic activities in Lagos, a densely-populated, infrastructure-deficient megacity, which as Nigeria’s main maritime terminal is vulnerable to external subversion. Creating other commercial nerve centres is not just an economic necessity; it is a national security imperative.
Investments in the power sector could highlight defacto industrial and economic clusters, tech hubs and commercial districts and reduce operating costs borne by these businesses. Enabling the shadow economy means hitching our polytechnics, vocational institutes and colleges of science and technology to the apprenticeship programmes that undergird the real expertise in the informal sector, thereby formally certifying and dignifying the sector’s value-adding actors, and promoting quality assurance, parity of esteem and dignity of labour in a society that erroneously glorifies sedentary white collar idleness over real problem-solving. Enabling the informal sector is the best way to empower Nigeria’s teeming young legions.
If nothing else, the new reality will focus minds. Succeeding generations have been socialised to see themselves as combatants in a sectarian contest for the spoils of the rentier economy (Tiv vs. Idoma, Igalla vs. Ibirra, Igbo vs. Yoruba, and North vs. South etc). But in a globalised economy, Nigerian entrepreneurs are actually competing with their Chinese, Indian and South African counterparts among other rivals. China, for example, has been instrumental to the decline of Northern Nigeria’s textile industry. Oil rents matter to “geopolitical zones” but real growth is about “economic zones”. State governments will have to develop collaborative regional economic initiatives around natural economic assets and inter-state value chains. Thus, Calabar could become the export terminal for an agro-allied industrial zone in the Middle Belt spanning neighbouring Benue, Plateau and Taraba, thus highlighting the potential of economics to create new definitions of collective interest that transcend primordial affinities.
An obvious question is how a broke government can finance these capital investments. Crude oil and natural gas account for 90 percent of our exports and 75 percent of all government revenues but they account for just 11 percent of the national GDP. Services, agriculture, industry and construction actually contribute more to the nation’s GDP than oil and gas. Thus, it can be argued that the economy is already diversified to an extent; what remains undiversified is our revenue base. In addition to this, job creation in public institutions remained sluggish. Various sectorial interventions continue to be implemented to support job creation including the Subsidy Reinvestment and Empowerment Programme (SURE-P) initiatives within the Graduate Internship Programme; public works programmes; community service; Youth Enterprise with Innovation in Nigeria (YouWiN!) and job-creating activities under the agricultural transformation agenda. There has also been a particular focus on women.
The public sector is still the largest employer of formal labour and with cuts to government expenditure due to falling oil prices, the new number of jobs will decline. The private sector will have to lead the way for employment creation in Nigeria
Our heritage has not been fully utilized. However at this point I would like to register an important caveat. The solid minerals sector is definitely a frontier of opportunity, some would say, the frontier of opportunity in the new economic reality in which we find ourselves. Besides the greatest resource of any nation is its human capital and the creativity and innovation exhibited by the people. The adaptive capacity of our population is what will ultimately set us apart even if there is a lot to benefit from our natural endowments in Nigeria.
The gap between the informal and the formal is why traders in our markets, despite their phenomenal retail volumes, cannot chart a course of growth. The incredibly large, super dynamic and ever-present informal sectors, from the bukka to the vulcaniser and tailor, are not integrated into the formal economic sector through the provision of microcredit or the establishment of other institutional support systems whereas , over 60 percent of Nigeria’s GDP is domiciled in this dimension – unofficial, unmapped and unrecorded. According to the Institute for Liberty and Democracy, nearly 94 percent of businesses in Lagos are in the $50 billion-informal sector which exceeds total annual foreign aid and foreign investment. Places like Onitsha, Aba, Warri, Port Harcourt, Kano, Kaduna, Ilorin and Abuja have equally buoyant informal economies.
To bring the shadow economy into the light, we must graft banking, venture capital, microcredit, insurance and infrastructure unto it. It also means eliminating the bottlenecks that subvert our natural entrepreneurial genius. There is no reason why with a digitised process, we cannot ensure that new businesses are registered within a working day. Digitising and simplifying systems and processes, making things easier for those seeking to make an honest living, should be the overriding orientation of governance.
Doing business in Nigeria is suffocated by unnecessary red tape, a predatory bureaucracy, and non-availability of favourable institutional credit. Consequently, entrepreneurs looking to make an honest living typically go underground. It’s time for a change. Thinking innovatively about our present debacle requires us to see our economic environment in a new light. Think of mechanic villages and computer villages (where software and hardware techies operate) as organically-evolved entrepreneurial clusters and tech hubs. Think of Alaba, Idumota, and Iweka Road, Onitsha as industrial and marketing hubs of Nigeria’s massive entertainment industry. Think of business centres as virtual offices and our great open air markets built on adaptable supply chains and social networks as dynamic wholesale and retail hubs. Witness our motor parks where competition thrives alongside anti-trust codes to prevent unfair advantage.
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