Growing hostile global economic and political climate is once again reaffirming the need to urgently and inwardly grow individual countries. Rising nationalism coupled with nationalistic policies; continued strain in international relations and alliances; threatened trade relations; and economic crises are unwanted but visible pointers to world inequality, subdued investments, and possible development aid/intervention cuts. It is therefore exigent for developing nations – Africa and indeed Nigeria to put in place country specific measures to become self-sustaining.
In the case of Nigeria, it is general knowledge that the economic outlook remains blur and recession still persists. Inflation rate uncontrollably rose in the space of one year to 18.55 at the end of December 2016 (after an average of 12.29% from 1996) while the US Dollar exchange rate in the parallel market in less than two years rose from the average 160 to over 490. Yet, more frightening are global economic projections for 2017 that remain blur and tied to the policy stance of the United States, which already signal hostility.
Hence, it has become clear to Nigerians that the best means to sustenance is by developing local resource and human capacity. Progressively, the Nigerian government has committed to encouraging and strengthening local product production capacity. At the 22nd National Economic Summit that held in October 2016, government officials and private sector chieftains committed to embody structural and fiscal changes to strengthen the Nigeria economy. Speaking on the summit with the theme “Made in Nigeria”, the Federal Minister of Budget and National Planning expressed the desire of the country to encourage more production and consumption of made in Nigeria goods and services. Meanwhile, stakeholders stressed on working out strategies to achieve self-sufficiency in the shortest possible span. Truly, Nigeria is prepared to develop its capacity and the Nigerian government together with citizens seem more awake than ever before to promote locally made products, in order to boost and sustain the economy against all odds.
Nevertheless, many products cannot be manufactured in Nigeria. A country can only produce what it is capable of producing, based on natural, human, and technological resources. Although Nigeria enjoys an abundance of resources, the country has for many decades relied heavily on imported products from revenue derived from oil; to the extent of exposing the economy to a flood of sub-standard products and other goods produced locally. It is therefore not enough to be enthusiastic about making more products in Nigeria or banning the importation of products, it is also crucial to intervene in the manufacturing sector in order to boost production capacity.
Nigeria is endowed with an abundance of natural resources basically in the form of land and extractives. Although recent discussions have spanned through exploring and developing the land resources for local food production and boosting economic welfare, less attention has been given to the extractives.
Oil and Gas
Although oil and gas dominate the attention of the extractive industry, it is persistently underdeveloped for local production. Nigeria’s refinery capacity is only 445.0 barrels per calendar day while output of refined petroleum products is just a meagre 24.1 barrels per day (2015, OPEC Nigeria Facts and Figures), it is not surprising that locally refined fuel cannot satisfy the over 183,000 population per day. Moreover, the National Bureau of Statistics reports that in 2016 only, Nigeria spent N2.019trn on petrol, N505.8bn on diesel, and N70.76bn on kerosene importation. Thus, the country imports over 80% of its petrol products both for trade and for local use. Besides, fuel imports account for 16.20% of Nigeria’s total imports. Hence, the ‘made in Nigeria’ campaign must first begin with ‘Made in Nigeria Fuel’ since oil and gas account for about 35% of GDP and 90% of total export revenue. (OPEC Nigeria Facts and Figures).
It is also interesting to note that besides fuel, other products that can be produced from oil have been ignored. Emphasis must also be made on developing our national capacity to produce these for export and local uses.
Nigeria has concentrated long enough on developing its oil and gas industry/resources over the mineral resources/industry, which accounts for the contribution of only 0.55% to the GDP – an alarming rate of less than 1%, according to the Minister for Solid Mineral Resources.
The Nigerian Investment Promotion Commission reveals that Nigeria is endowed with precisely forty four (44) solid mineral resources in commercial quantity; interestingly, these resources span all thirty six (36) states and the Federal Capital Territory (FCT) of the forty four (44), seven have been prioritized for private sector participation and investment.
It can be alluded that since Nigeria has a plenitude of solid minerals, there is a natural resource capacity to locally produce, refine and/or assemble several of the solid mineral outputs it currently imports. Interestingly, some of these minerals have been earmarked for domestic industralisation and there is a strong possibility for a drastic reduction in importation of several products if these minerals are maximised.
Although Gold deposits are predominant in Northern Nigeria and some parts of Southwestern Nigeria, commercial exploration has seized to occur since the end of the Second World War. Experts reveal that tremendous Gold deposits lie untapped in Zamfara, Kebbi, Kaduna, Niger, Kogi, Osun, and the FCT while there is some presence in Cross River, Oyo, and Kwara states. Just as oil is largely used to produce fuel, Gold is majorly used to produce artistic products and jewelry therefore, with the Gold capacity in Nigeria; these products should not be imported at all. However, there are no large-scale jewelry manufacturing companies in the country at the moment to meet needs; raw Gold is still moved out to Europe and other developed countries for processing. Although Nigeria’s Gold reserve capacity is sufficient to cater for the country’s artistic and jewelry needs as well as contribute to foreign revenue, it is underdeveloped.
Baryte Ore reserve in Nigeria is estimated to be over 2000metric tonnes, spattered across the Northern and Eastern parts. Benue, Taraba, Bauchi, Nassarawa, Plateau, and Cross River states alone have sufficient deposits for oil drilling aside deposits in some other states. Similarly, Bentonite in Nigeria is about 700million tonnes in reserves. Products from both minerals are major resources for crude oil drilling which is why their volumes coupled with the country’s oil capacity should be hugely beneficial to revenue. However, Baryte is still imported into the country; though its importation was banned in 2003, it was re-instated in 2013 due to production capacity. Development of capacity needs to be urgently reviewed in order to increase local production capacities of these products; Barytes and Bentonite need not be imported at all into the country when there is an abundance of both. Other products that can be locally made from them include plastics, paper, clutch pads, brake linings, paint, golf balls, and glass.
Iron Ore is another priceless resource Nigeria is privileged to have in bounty; the country has the 12th largest reserve in the world with over 3billion tonnes found in both the Northern and the Eastern regions. Experts assure that the quantities of Iron Ore deposits in Nigeria are sufficient to produce iron and steel for building and furniture including for other products as bicycles, paper clips, and transformers. Other economies use this same resource for automobile and locomotive production; yet, Nigeria has the resource but lacks the means of refining it. Unfortunately, both Iron Ore and products made from it are still imported into the country.
Similar to Iron Ore, Bitumen, which is largely used for road constructions and roofing felts/seals is of large quantity in Nigeria, Ondo State is estimated to solely have Bitumen deposits that can compete with crude oil reserves in the country. With deposits of about 42billion tonnes spanning approximately 120kilometers, Nigeria has the second largest Bitumen deposits in the world next to Canada. Sadly, Nigeria has failed to maximize this potential as Canada has. Besides, estimated deposits indicate that Bitumen is almost as twice the amount of existing crude oil reserves in Nigeria yet, Bitumen used in the country is imported, mostly due to high cost of tapping the resource and weak technical expertise.
Nevertheless, Limestone found in almost every state in Nigeria is the solid mineral resource, which seem to be most explored and developed in the country however, its use outside cement making has not been fully explored. With about 2,3trillion metric tonnes and 568million tonnes of proven reserves, Nigeria can conveniently produce cement, granite, sand, glass, and iron. Unfortunately, production facilities are limited in their production. More so, though bagged cements have been banned from being imported into the country, cement prices have remained unaffordable to Nigerians. The Group Managing Director of Dangote Cement in November 2016 lamented the huge cost of local cement production, which he hinged on power shortage, and high cost of fuel. Cost of local production is still high for the resource even though it possesses high prospects for yielding increased FOREX earnings for the country.
Gemstones, Coal, Lead, Zinc, Rock salt/Salt springs, and Gypsum are other commercially available minerals that can be used to strengthen Nigeria’s local products production capacity. Nigeria is capable of producing large quantities of jewelry and other art forms from Gem stones, steel and sufficient electricity for every citizen from its over 600m tonnes proven reserves of environmental friendly Coal, batteries, ammunition, Ultraviolet Ray Protectors, plastics, rubbers, fertilizers, cosmetics, and plumbing and soldering products from Lead/Zinc, classroom chalks and POP from Gypsum as well as table salt from Rock Salt/Salt springs. Yet, about $700 is still spent to import 90% of salt used in the country and over half of Nigerians lack access to power supply while the other half suffer epileptic access.
It is quite obvious that Nigeria has the natural resource capacities to produce thousands of finished products on its shores, either for trade purpose after considering comparative advantages or more importantly, for citizen’s use. If these resources are well harnessed and developed with government and private sector participation, Nigeria can achieve the aim of becoming economically self-sustaining and the lives of its citizens greatly improved. In fact, the country has the capacity to move from being a middle-income nation to a high-income economy. Hence, if Nigeria can maximize its local production potential, it would seize to import almost every product, feeding other economies while starving citizens.
Nevertheless, to extract and develop these minerals into products require technology, manpower empowerment, knowledge transfer, friendly business environment, subsidised production costs, as well as government investments and active private sector participation. Furthermore, a desire for local patronage should be the attitude of every Nigerian.
It is however progressive to know that there are abundant investment opportunities in the solid mineral industry of Nigeria. Prospecting licenses for investors (both local and foreign) to participate in the exploitation of the vast mineral resources in Nigeria is granted by the Federal Ministry of Solid Minerals Development and out for exploration.
* TO BE CONTINUED NEXT WEEK.