How To Use Solid Mineral Extraction To Boost Yoruba Or South West Economy

If the Ooni of Ife, one of the premier traditional rulers of the Yorubas had his way, the gold in Ilesha would be exploited in a bid to attract more employment-bringing investment to Yoruba Land.
The Ooni is not the only person desirous of seeing an immediate exploitation of solid minerals in Yoruba Land or South West Nigeria. A regional commission of Yoruba states, the Development Agenda for Western Nigeria (DAWN) Commission at a recent roundtable, identified 10 solid minerals that can be exploited commercially in the Yoruba Land.
They include gold, tar sand, glass sand, construction sand, clay, oil and gas, limestone, granite, phosphate, gypsum, bitumen and silimanite, dimension stone, gemstone, marble, aquamarine, tantalic, feldspar, tourmaline, emerald, quartz, syenite and topaz.
What I see here is money, lots of money that don’t have to be at the beck and call of global crude oil prices. As far as recent experiences show, diversification away from crude oil is key; and it is not just agriculture or manufacturing that can play an effective role in a regional economy like that of Yoruba Land, but also the long overlooked mining sector.
In fact, mining can be a linchpin that would support other industries and give the economy great support. Let us look at what mining has done in the Australian state of New South Wales, for instance.
A Centre For International Economics (CIE) report in 2014 listed the following benefits of the mining sector to the New South Wales economy.
The mining industry of the state derived $12.5 billion in value added in 2012-13. The mining sector was estimated to purchase $9.6 billion of goods and services each year, and 60 per cent of these goods are sourced from within New South Wales, thus adding value to the states’ economy. And with another 22 per cent of goods and services being sourced from other Australian states, you can see the added value to other Australian states. This is something that can be replicated in Yoruba Land if the DAWN proposal is acted upon with enough political will by all Yoruba state governments and state ruling party leaderships.
About 70 percent of the minerals produced (in terms of value) in New South Wales are exported, bringing in foreign exchange – which is of course unencumbered by the ‘almighty’ global oil price – and boosting Internally Generated Revenue. Twenty one percent of the minerals are used by other industrial sectors in the state, boosting local content and industrialization; and making cost of production cheaper. Nine percent of the minerals go to be used in other Australian states.
The government of New South Wales also gets a lot of revenue in terms of taxation and fees frommining activities carried out in the state. These are all ways the South West Region or Yoruba Land can boost its Gross Regional Product, diversify its economy away from dependency on the Federation account, and oil. If the exploitation of the 10 commercially viable solid minerals is carried out with determination, it wouldn’t matter too much to the region if oil is at $25 dollars or at $85.
Professor Gbenga Okunola who facilitated the DAWN roundtable, presented a few obstacles to the exploitation of solid minerals in the region. These include: lack of funding, lack of clear-cut optimization model, misplacement and underutilization of capacity and lack of regional cooperation. Let us briefly analyze these obstacles and provide workable solutions to them.
• Lack Of Funding: With the recent fall of the crude oil price, this is of course a very serious obstacle. To make matters worse, it is no longer easy for state governments to borrow money from banks. At this junction the aim should be to seek out the mineral that is least expensive to extract and start exploiting it. Federal Minister of State for Petroleum has said that crude oil price may soon rise to $50. Let’s hope he is right, and then if that happens more mineral extraction projects can be launched at a faster rate. But before then, the best bet would be to copy the Japanese style or incremental improvements. For that to happen, the state governments and ruling parties have to be a bit more altruistic and apolitical. If the least expensive mineral to extract is in a PDP state, then APC governors and regional leadership should still support fully such a project, and vice versa. That is the only way it can work. If the extraction projects are done piecemeal rather than wholesale, it won’t be possible. State governments can commit to contributing no more than 5 percent of their revenue to this, and this percentage can be increased when immediate problems like outstanding arrears are sorted out. But the point is that those small contributions combined can be very effective.
For instance, remember the Barak Obama Campaign didn’t have access to major donors during Barak Obama’s first presidential campaign in 2008. What they did was to create a platform for smaller donors who frequently gave little amounts like $5, $3, 7 dollars, etc. In the end they had garnered a $100 million which he used to win the elections.
• Lack Of Clear-Cut Optimization Model: The optimization model to use is the Japanese strategy of incremental improvement or continuous improvement, rather than the more common model of Breakthrough Improvement or ‘improvement all at once’.
Continuous Improvement has been defined by the Institute of Quality Assurance as, ‘A gradual never-ending change which is: ‘… focused on increasing the effectiveness and/or efficiency of an organisation to fulfill its policy and objectives. It is not limited to quality initiatives. Improvement in business strategy, business results, customer, employee and supplier relationships can be subject to continual improvement. Put simply, it means ‘getting better all the time’.’
That is the model that should be adopted until the the availability of more funds makes the Breakthrough Model practical in the bid to profitably extract the minerals. A Yoruba proverb says that until you can hold a knife on its blunt edge, you have to be careful holding it on its sharp edge.
Let me add that although Continuous Improvement Model could seem to be a ‘poor man’s choice’, nothing could be further from the truth.
Continuous Improvement is widely credited as one of the key strategies that has kept Toyota as one of the world’s most formidable car manufacturers for many years now. For instance in 2013, Toyota sold a total of 9.98 million vehicles, more than any other car manufacturer in the world that year, largely thanks to the strategy of Continuous Improvement. Yoruba Land should adopt this strategy to gain economic advantages in solid mineral mining.
• Misplacement And Underutilization Of Capacity: It is hoped that if Incremental Improvement as an investment strategy is seriously put into practice, underutilization of capacity will gradually become a thing of the past.
• Lack Of Regional Cooperation: The greatest obstacle to regional cooperation in Yoruba Land is the perception that because there are several parties controlling the states, political cooperation to achieve a common goal is impossible. But that perception is not true. In fact there is a way for the governments of the South West/Yoruba states to come together on this issue of extraction of solid minerals and other economic issues even in the midst of severe partisan competition. This is the way below:
A South West Economic Council Should be formed following the guidelines below.
The membership must compriseof the following categories of members
1. Observers: The Ooni of Ife and The Alaafin of Oyo and any 6 monarchs they both agree through consensus to invite to join them in any given year at the meetings. These invited monarchs should be chosen on the basis of one for each state.
2. Governors of all the 6 Yoruba states, regardless of party affiliation. Each state represented by their governor would hold the rotating chairmanship of the Economic Council. The rotation would be done in alphabetical order.
3. Regional Leader of any party that has a governor in a Yoruba state. In the present case it should be Bola Tinubu of APC, and the South West Zonal Chairman of PDP. These Regional Party Leaders would be there as ex-officio members and patrons of the Council.
• The Council should adopt and seriously follow the motto, ‘All For One And One For All’ in decisions of investment: Meaning, decisions on investment should not be made primarily based on partisan considerations but based on a holistic view of what will benefit the South West economically.
• This pooling together of investments would not mean that state governors cannot pursue independent economic policies and projects, but simply mean that each governor now has the license to tout the success of any Council economic venture in any other South Western state as his own to his own people, adding them to his accomplishments for the larger Yoruba socioeconomic community.
• The Economic Council should have a standing secretariat and an Admin Secretary.
• The Council should liaise regularly with other South West economic bodies like the Oodua Investment Limited and the DAWN Commission.
If all these are done, creating jobs and revenue would only be the starting point of the economic rise of the South West or Yoruba states of Nigeria.