by crossriverwatch admin
We sit on a pot of gold, yet we wallop in poverty, debts and gross unemployment! This Statement comes to life, when we review the rate of economic hardship and joblessness among young people in Cross River State compared to our natural mineral deposits and the available international markets for these products.
While it is common knowledge that quarry business involves crushing rocks and selling same to local consumers for building construction, roads and other domestic uses, it has not really dawned on our policy makers that the States involvement in exporting quarry stones to international markets in China can be a big business comparable only to exporting crude oil.
In this analysis, we propose that the State government should invest directly in quarry development, shipment of raw stones and processing of stones for export value.
China usually imports marble quarry stones from Egypt Turkey, Italy, Spain and Iran. In the first half of 2013, the five countries mentioned above have exported to China as much as 85% of the total amount of marble quarry stone China imported during the period. India and Brazil are also the major exporters of granite quarry stone to China. In the first half of the year, the granite quarry stone China imported from the two countries made up a large percentage of the total import.
The remote question therefore is: why is it possible for the Chinese to buy quarry from Egypt, Turkey, Italy, Spain, Brazil and India and not from Calabar-Nigeria? The reason is not farfetched. Our Quarry stones are not accessible to the international market, neither is it refined as end products which are in high demand today. Inaccessibility and lack of infrastructural transport amenities to and from international markets including the non availability of commercial large scale crushing and an accessible sea port is largely responsible. To put it in a lay mans verbiage, we are not ready to engage the international markets with this product.
Is our inability to engage international markets with our quarry products, due to an oversight on the part of policy makers, ignorance of the existence of these markets, political will to put in place a State agency capable of delivering on the project as a business venture, an over dependence on a local private sector too scared to invest in long term business ventures, or irresponsible federal tax policies and revenue allocation formula on natural resources? This question remains to be answered.
This business model (Exporting Quarry) will turn around the financial fortune of the state if we direct our resources into developing this industry. Because of the large scale investments involved in infrastructural readiness, we propose that this project be spearheaded by the state government in a similar way the Nigerian National Petroleum Corporation handles the business of Crude for the federal government. I understand, Skeptics will be quick to point out that we cannot talk about public ownership of production related services in an era were State policy is geared towards privatization.
However, what we have overlooked all these years is that the premature transfer of state owned Corporations to a weak and unorganized private sector is the central cause of the high rate of unemployment witnessed in Africa today.
Recent studies have shown that the double and triple digits of unemployment rates in Africa today is largely attributed to the World bank’s premature privatization drive on African economies without recourse to the capacity development and preparedness of African entrepreneurs to initiate and sustain the drive. (Odidi, O, et al, 2005).
In Europe, United States and Canada, their governments operated Public Corporations for well over two hundred years, promoted the capacity development of the private sector, and at the stage were the private sector was fully organized, that was when transfer to private ownership occurred. The private sectors were fully developed in terms of capacity and managerial ability before the governments of Europe and America moved the sector to private ownership.
A more mature private sector is prone to taking business investment risk, engaging in long term slow yield but steady production related initiatives. This is what the organized private sector in Africa lacks, and the reason is simply premature handover of public corporations to a sector too scared to engage in business risk. While in Europe, handing over State owned Corporations was a function of making government smaller, in Africa, large scale corruption in the management of public corporations was the leading cause of privatization.
The trend right now in Nigeria is that governments cannot run business, hence the call to privatize all state agencies. While this argument may sound very reasonable, however, the whole privatization exercise in Nigeria today has been greatly mismanaged, so poorly executed such that most State enterprises that were privatized went under due to mismanagement from inexperienced operators.
The long term consequence of this premature handover of public enterprises to a private sector too fragile to engage in business risk, and who prefer to work with a small manageable labor force, and rather than reinvest profits prefers primitive accumulation of wealth. This has led to slow economic growth, stagnant labor force, leading to large scale public unemployment in Nigeria.
To address unemployment once and for all in Africa, we would need to revert to the State’s participation in production related services, reintroduce cooperative business ownership and allow the private sector to grow and develop naturally over time.
Due to increasing construction in China, The Chinese are willing to buy stones in any part of the world. The possibility of the Cross River State government investing directly in this sector, by partnering with international finance to improve accessibility and support transport logistics (deep Sea Port) will be the turning point of economic growth in our State.
At present we have over two dozen private quarry developers in Cross River State. On a daily basis, they excavate precious stones from our beloved state which are transported and sold in different parts of Nigeria. Cross River state government makes little or no profit from this venture, the government is not authorized to tax this companies due to federal regulations on mineral deposits found in States and their limited liability statuses. Why these mammoth policies exist and why no State government has dared to challenge the Central government for over four decades remains a moot question.
However, nothing stops the State government from competing favorably with the private sector in this line of business. We cannot overcome poverty and unemployment by babysitting a primitive private sector too scared to take business risk, rather, the way forward to economic prosperity and job creation is for the State government to revert back to cooperative business ownership, state sponsored industries including export quarry development.
While many Nigerian States with natural resources hide under these regulations by failing to explore the natural resource industry, however, the law does not in any way prevent the State governments from competing with the private sector in exploring these resources.
While most analyst will be quick to point out that state governments are inefficient when it comes to running businesses, I strongly disagree, and reiterate that the government’s participation in production related services in steep competition with the private sector is the surest way to bail us out of economic poverty and mass unemployment given our type of neo colonial economic system.
The Nigerian economic system is closer to the Chinese Socio-capitalist model than the American Individualized-Capitalist system. Our continuous failure at privatization is because we keep adopting the American Project type models rather than the Chinese process models of privatization.
Privatization has failed to create jobs in Nigeria because the internal dynamics that drives the exercise has been an attempt to curb corruption in public corporations rather than the need to make governments smaller due to the development of the private sector as found in developed societies.
Government’s intervention in production related services is largely responsible for the economic growth in China and much of Eastern Europe. State governments can run effective and efficient state owned Parastatal and investments bureau with the backing of Strong political will from the leadership coupled with harsh punishments for corruption and economic saboteurs.
To the best of public knowledge, proposals on constitutional changes on revenue allocation and ability of states to collect taxes from limited liability private investors who currently operate and invest in natural resources have been sent to the National Assembly and proposed National Conference by various State governments in Nigeria.
Since we do not advocate for a civil war or a revolution as a way to enthrone true federalism, it therefore makes economic sense for State governments to revert to active participation in production related services either through the re-establishment of cooperative societies or setting up State agencies that will compete favorably with the private sector.
Nigeria is like a spoilt child, pampered and spoon fed since independence. At age 53, a man is considered an adult; however, Nigeria at 53 still spoon feeds her States through a federal allocation baby formula, to the extent that states feel it is their birth right to receive federal allocation. Today, almost 80% of States in Nigeria would not be able to pay salaries without federal allocation. As a point of note, the law allows state governments to partner with International Oil Firms to own and operate oil wells.
It is in similar fashion, that I argue, that Cross River State rather than wait for a constitutional amendment on taxes and revenue allocation to enable it to start generating income on her natural resources, should proceed to set up a State agency that will partner with International quarry investors to exploit our natural stones. This will be similar to the role NNPC plays for oil resources in the federal economy.
I would assume, it is within this thinking that Senator Liyel Imoke set up the department of Mineral resources. However, whether their terms of reference are strictly regulatory or designed to engage in production related services remains to be seen.
A successful export quarry investment will require a deep sea port for berthing of international Cargo vessels.
Dredging the Calabar River should be a capital project of priority to the state government. Apart from making functional the export free zone, it will open Cross River State to exporting quarry stones to China which will be the beginning of economic wisdom.
As a matter of economic urgency, the State government should steer the ship of her economic development and make export quarry development a dream come true.
The Proposed Way Forward!
The State government should upgrade the recently established department of solid minerals to a full State Parastatal with the responsibility to source for International investment finance (preferably Chinese funds) to design, build and operate a Cross River State owned quarry development mining plant in Akampka with an export capacity.
The state government should partner with international finance to dredge the Calabar Port in a capacity capable of Berthing large vessels for the export of quarry stones. It is pertinent that the state government directs the project development of the Port from start to finish and ensure that the project is not abandoned.
The state government should establish regulatory agencies to ensure compliance of best practices and environmental protection from pollution that will result from large scale mining, to protect the local villages from pollution and the provision of social amenities and pay due compensation for lands reclaimed by the state and investors.
The state government should lead this initiative due to the large scale infrastructural investment involved. Nigeria and Cross River State in particular cannot succeed and break through industrial development without export trade. If government projects or investments must strive to succeed, they must have an export component.
Remember the biblical quote? From the days of John the Baptist until now, the kingdom of God suffereth violence, and the violent takes it by force! This is the same quote that can resolve our economic woes. The people of Cross River State must rise up and take on their development challenges for future progress.
Can we turn around our economy from oil dependency to exporting stones? Yes we can! Lets dream of exporting our quarry to markets in China, lets dream of a world class sea port in Calabar developed in partnership with International finance strictly for exporting stones and to support the export free zone, lets dream of the development of cottage industries to process finished products like ceramics and granites from quarry stones, this is the only state we can call our own.
Let us dream of development projects with variables we can control. This can only happen with a political leadership that is business savvy and promotes efficiency in public service, checkmates government excesses and corruption and has a definite focused development plan based on achievable timelines.
PRINCEWILL OJONG ODIDI IS A UNITED STATES BASED PROJECT MANAGEMENT AND FINANCIAL ADVISORY CONSULTANT.
FACEBOOK: PRINCEWILL ODIDI EMAIL: PRINCEWILLODIDI@YAHOO.COM
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