NEF ignorance and gold refinery

By Dele Sobowale

The Northern Elders Forum, NEF, has embarked on the wrong battle based on absolute ignorance. For weeks, since it was announced that a gold refinery will soon start operating in Lagos State, while a lithium processing plant would be established in Nasarawa State, the NEF has been at war with the Federal Government, FG, based on a combustible mixture of ignorance, hypocrisy and mischief. Their grouse, summarized, comes to this. Most of Nigeria’s gold deposits is situated in the North; therefore, any gold refinery, private or public, must be established in the North. 

Is this position based on any principle which the NEF has actively promoted in the past? Is it a generally applicable policy for economic development? These questions will be addressed shortly. But, the issue of collective mischief needs to be addressed first; because that underlies their position – above all else.

NEF mischievous and hypocritical

“Hypocrisy is saying one thing and doing another.”

  The Minister for Solid Mineral Development, Dele Alake, had repeated several times, since NEF, objected to the establishment of the gold refinery in Lagos by pointing that it is a private investment – without any involvement by the FG. That being the case, only mischief makers can question the right of the investor(s) to determine where to locate their business. Dangote Refinery is located in Lagos; which produces very little crude oil. To the best of my knowledge, nobody, NEF included, ever asked why the oil refinery is not in Rivers, Delta or Akwa Ibom. Dangote Cement obtains most of its raw materials from Kogi and Edo States. Its headquarters is in Lagos – not Lokoja or Benin City. Again, nobody had asked why? Certainly, the NEF is aware of these examples; but, unserious protesters invariably exhibit selective remembering and selective forgetting. They never allow facts to get in the way of pronouncements aimed at creating conflict; where none should exist. This is a classical example.

Hypocrisy had trailed the actions and utterances of the leaders of the North under military and civil governments with regard to location of the headquarters of major public organizations. The seeming call for equity, which the NEF is making, was firmly rejected by their leaders during the 1994-5 Abacha government’s Constitutional Conference. Victor Attah, a member of that Conference, had outlined what would later be summarized as his call for RESOURCE CONTROL, asking for state control over resources   in each state. He received very little support from Southern delegates; but total hostility from Northern delegates who feared loss of oil revenue would result if the proposal sailed through. The best Attah could get was concession of 13 per cent derivation – without On-Shore/Offshore dichotomy. Later, President Obasanjo and Minister Bola Ige sought to deny oil-producing states of control over the oil produced in those states.

  When Attah, as Governor of Akwa Ibom State demanded that the major oil companies should relocate their headquarters to the Niger Delta, the strongest opposition came from the North – which still does not produce one drop of crude oil.

 It was not only the headquarters of the NNPC(L) which went North; NIPOST, NCC, VAT Office, Nigeria Ports Authority, among others followed – despite the fact that everyone of these organizations derive the vast majority of the revenue from the South.

The truth is, Northern Elders, since 1970, have never cared about equitable allocation of revenue or opportunities – until now. Unfortunately, like sleep-walkers who suddenly woke up, they have started off fighting the wrong battle and in the wrong way. 

Only self-deluded individuals can assume that the FG can stop a private venture, at an advanced stage, for no just cause. That step would send the wrong signals to investors globally who are now taking serious interest in Nigeria as the next great investment destination. President Tinubu might as well go home if he abandons one of the most promising initiatives of his government to ill-informed individuals; who expect to be consulted by government before strategic decisions are made.

Nigeria needs more than one gold refinery

“Competition is the soul of business.”

  To maximise Nigeria’s gold deposit potentials two fundamental policy decisions must be made ab inito. First, governments, federal, states and local governments must stay away from investing public funds in the refineries. We should learn from bitter experiences with publicly-owned enterprises since the first republic. Very few public enterprises make money. Invariably staffed by political appointees, who regard the opportunity as gift rather than sacred duties and obligations to be discharged, they set about looting the enterprises. Second, governments must allow competition in the establishment of the gold refineries. Governments should not choose favourites; instead, each company should be allowed to operate as best as it can – within the laws and regulations established to guide operations in that particular sector.

That said; the alarm raised by the NEF is not only hypocritical and mischievous, it is premature. Nigeria’s four petroleum refineries were not established at the same time. That made sense because each new sector – oil, airlines, steel, cement, natural gas etc – dictates new learning experience, new laws to regulate its operations and environmental impact assessment to ensure that while it benefits society, it does not create victims and tragedies such as several communities are experiencing with mining rare minerals.

  The pioneers in this venture also deserve our support and understanding. My experience with a brewery in Kano and fully-automated rice mill in Sokoto taught me that most of the problems, which might determine the fate of the new business, were not mentioned in the feasibility studies. The discovery that almost thirty per cent of public water in Kano would be diverted to the new brewery almost brought the project to a halt – after seventy per cent of the funds were committed. It is difficult to determine what would have happened if Haske Rice Mill, Sokoto, had not folded up after my departure. Within two years of operations, rice husks had piled up and approaching our fence with Sokoto Cement – whose managers, though friends after office hours, were warning seriously about legal action to stop our operations.

Certainly, we don’t know a lot of things yet about gold refining on a large scale Nigeria; we know even less whether it will be profitable and sustainable or not. Again, our past experience with automobile assembly plants should provide caution in this regard. 

The President Shagari administration established car and trucks assembly plants in Lagos, Ibadan, Enugu, Kaduna, Kano and Bauchi. None of them proved sustainable; loans taken to set them up became part of the huge debt burden which governments after 1983 struggled in vain to repay until Dr Ngozi Okonjo-Iweala got us out of that debt trap. Nigerian history does not repeat itself; but the follies and crimes show up in new forms; each time packaged as concern for the people by those who hope to benefit.

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