Can states exploit their mineral resources?


THE recent disclosure by the Minister of Solid Minerals, Dr. Kayode Fayemi that state governments are free to explore and exploit mineral deposits in their domain is cheery news, which may have excited many right-thinking Nigerians who want unfettered development for the country but disappointed that self-imposed constitutional strictures, have, for decades, hindered development and kept Nigeria napping over her abundant mineral wealth. But the issue of states exploiting their mineral resources is not as simple as portrayed by the minister when the obnoxious constitutional provisions are still intact.

Dr. Kayode made the statement while hosting officials of the Lagos State Government in Abuja. The 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 of 12 million metric tonnes around Epe; silica sand of up to 200 billion cubic metric tones around Ibeju-Lekki area and clay of about 180 billion cubic metric tones 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.” If the states had rights over their mineral resources, why should there be other stakeholders not approved by the states?

Is the minister 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 are still encumbrances, given the nepotism, favouritism, 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 unnecessary 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 is genuinely desirous of lifting the constitutional restrictions on solid minerals, he may have to go a step further to ensure that the law is abrogated. Ideally, every state should own its mineral resources without having to apply to the Federal Government for permission.

Dr. Koyode should move for an executive bill to be sent to the National Assembly to abrogate the constitutional provisions that gave exclusive rights on solid minerals to the Federal Government. The right environment should be created, legally, for states to have unfettered access to their mineral resources.

How does this apply to the oil resources? Like other minerals, crude 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 like Nigeria. The burden of catering for the states has to be removed from the Federal Government while the states are leveraged through the exploitation of their mineral resources.

Certainly, Dr. Kayode said what many people would like to hear. And, whether or not he is flying a kite, the truth remains that the mass poverty and underdevelopment quagmire in the land are self imposed and are an embarrassment to the world. It is pertinent to ask why only Dr. Kayode is coming out with this truth now.

Why have the state governments, over the years, not been able to unveil the constitutional provisions that allow them to exploit their mineral resources irrespective of the Federal Government’s exclusive rights over such? Even Dr. Kayode, as governor of Ekiti State, did not avail himself with the constitutional provisions. He did not exploit the minerals resources in Ekiti State.

Why are the minerals overlooked, while illegal miners alone feast on them? Why focus on oil alone with all the attendant economic mismanagement and corruption? One way to curb corruption is to stop the monthly allocation sharing syndrome and let the states cater for themselves using what they have as resources in their domain.
Dr. Kayode would etch his name on gold if, as Minister of Mines, he lifts the veil off the face of state governments and paves the way for them to exploit their huge mineral resources. That, alone, would make for a historic CHANGE in Nigeria’s political economy.

At present, the country is facing economic emergency. My people say when there is famine you go back to where yams used to be stacked. 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 arising from the oil glut, which warrants inward looking. It is senseless for Nigeria to be caught in the web of global oil downturn when there are numerous alternatives to leverage on. Let the mineral wealth be opened up.

Last December, 2015, many Federal Government workers did not receive their salaries. Similarly, many states are in quagmire unable to pay salaries of workers or meet other basic statutory needs. Workers are staging protests in different states. 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 world and manipulations on oil, what happens if oil falls to $5 per barrel? What would the country do? Governments would be in hot soup, as the entire budget projections for 2016 would be a mirage.