In year 2011, shortly after the assumption of office of Senator Ibikunle Amosun as Governor of Ogun State, I granted an interview to the National Mirror newspaper, where I said the Amosun Administration cannot survive without borrowing from financial institutions to augment the dwindling revenue from the federation accounts as a result of the downward slide in oil revenue.
In fact, I stated clearly, for the avoidance of doubt, that the Administration immediately preceding Senator Amosun’s was opposed on the issue of N100 billion bond it was seeking (which opponents, including myself, tagged BOND OF BONDAGE), was seeking towards the tail-end of its tenure because we felt the bond being sought then was to, among other reasons, prosecute electioneering war. I went further, in the said interview, by urging the new administration to look at the potentials inherent in bitumen exploration, which is most generously found in Ijebu East LG area of the State.
Those who did not see beyond their political noses described my interview then, as a support for Governor Ibikunle Amosun. Today, I have not only been vindicated, also, my charge to the State Government on diversification of revenue is as relevant as when I first made it about five years ago.
Rise in IGR
Ogun State, no doubt, owes enormous appreciation to Governor Ibikunle Amosun and his team for the ingenuity that has manifested in the Internally Generated Revenue of the State rising from less than N1 billion in 2011 to about N4 billion in 2016. In a recent survey results released by National Bureau of Statistics, NBS, Ogun State is rated among the five successful/viable states in the country in terms of IGR. It is estimated that in the preceding year (2015), Ogun State increased its IGR by over 90 per cent.
Revenue versus Development What is the situation today?
The development needs of Ogun State are skyrocketing with the unparalleled infrastructural initiatives of Senator Amosun’s Administration. Enormous stress is increasingly and unceasingly exerted on government’s meager resources to cater for payment of salaries and allowances of workers, grants and subventions to statutory agencies and tertiary institutions, pensions and gratuities, and of course, daily running of government. Ironically, oil revenue is nose-diving and oil producing nations are seriously challenged, not only on production and marketing, but also on the urgent and inescapable search for alternative revenue sources for sustenance. Saudi Arabia not only relieved her long standing Petroleum Minister (of about 20 years) of his appointment last week, the Saudi authorities also announced structural reforms programme aimed at less dependence on oil revenue and diversification of her revenue base.
Back home in Nigeria, I take the words directly, out of the mouth of our Minister of Solid Minerals Development, Dr. Kayode Fayemi, at the 3rd Chief John Agboola Odeyemi Annual Lecture at Obafemi Awolowo University (OAU), Ile Ife, State of Osun, on April 29, 2016: “We are now facing a future in which crude oil either ceases to be a strategic resource or one in which our status as a producer becomes irrelevant to our prospects for economic advancement within the international economic environment. We live in a world in which new technologies, such as fracking, have unleashed a dynamic of resource abundance rather than resource scarcity and which is resulting in less power in the hands of a few suppliers. Previously import-dependent consumers like the US are increasingly on the cusp of energy self-sufficiency. By 2013, the US, a major importer of Nigerian crude, had already reduced the importation of Nigerian oil to 300, 000 barrels from 1.1 million. In 2014 that figure plunged to zero. Even before this technological shift occurred, we had already ceased to be Sub-Saharan Africa’s sole energy power house. New players like Ghana, Kenya and Liberia have emerged to add to the competition in the market. At the same time, the naira is suffering its sharpest decline in recent years. This decline is a consequence of the decrease in our external reserves, the sharpest drop in crude oil prices since 2008 and an ultimately logical vulnerability of an economy that is too one-dimensional and insufficiently versatile to absorb global price shocks.”
And there comes my position that Ogun State should look at the immense multiple economic potentials inherent in the exploration of bitumen in Ogun State.
The case for Bitumen
This position paper is not about definition of bitumen and value of bitumen products. But let me copiously quote the wordings of eurobitume.eu. Needless to say that I agree totally:
“A Material as Fascinating as it is Versatile Bitumen is an unsung hero of our modern world. A crucial component of the asphalt we use to build roads, bitumen holds our city streets together and connects cities and countries across vast distances. It provides a backbone for personal and business travel, tourism and logistics. But it’s not just roads – bitumen is vital to all kinds of construction and infrastructure projects, large and small. Without bitumen our world would be a very different place; our cities and our houses would be very different; our lives would be less mobile and less connected. This valuable material has countless uses and applications, and more are being discovered every year, thanks to research and development within the bitumen industry. Bitumen is not only flexible and multi-functional, it has a number of other benefits, too; it is fast to install and safe to use, as well as being durable and hard-wearing. It is easy to maintain and 100% recyclable, making it the perfect choice for forward-thinking construction and infrastructure projects.”
In February 2016, I had a personal interaction with the Minister for Solid Minerals Development, Dr. Kayode Fayemi, at the Awujale Palace, Ijebu Ode, during the visit of President Muhammadu Buhari to Ogun State for the commissioning of 40 projects commemorating the 40th anniversary of the creation of the gateway state. I told him about the very large deposits of bitumen in Ogun State, especially in Ijebu East Local Government area. He immediately expressed readiness to do business with Ogun State.
Last week, I met the Senior Technical Adviser/Chief of Staff to the Minister, O’seun Odewale, in Abeokuta, where I chaired the first summit of The Rebuilders. I told him of the huge deposit of bitumen in Ogun State. He publicly assured that he will follow-up quickly. Ogun has bitumen! For the avoidance of doubt, Ogun has deposit of bitumen. Ijebu East, as a local government has about the largest deposit of bitumen in Nigeria. From Imeri near Ijebu Imushin to Owu-Ijebu, down Ogbere, Imobi and Ajebandele; Ijebu East LocalGovernment practically sits on bitumen. In fact, in places like Orisunmibare in Ajebandele ward 11, bitumen flows like a river.
Perhaps, ahead of some other states in Nigeria, Ogun State got a license for bitumen exploration under the regime of Chief Olusegun Obasanjo. A delegation was sent to Scotland by the then State Government. However, lack of transparency, entrenched ulterior interests not only slowed down the pace, but finally scuttled it. Eventually, the Federal Government, which gave what I see as unrealistic six-month probational license, withdrew the license. My current fear is that Ogun State seems not to be in the reckoning of the responsible federal ministry on the issue of bitumen.
I have monitored activities of the Minister recently and where he listed mineral resources in the country, Ogun State is not listed has a bitumen state. And this is where the Ogun State Government must act quickly.
Change and new latitude for partnership
Unlike the previous atmosphere, Minister Fayemi has shed encouraging light on the renewed drive of the present administration in collaborating and diversifying revenue sources and focusing on solid minerals in line with the manifesto of the ruling All Progressives Congress (APC): “The main factors that militate against states being able to appropriate and exploit these resources are rooted in our constitutional architecture which centralizes control over subsoil resources in the federal government. Not only does this feature negate the principle of subsidiarity which would have allowed states to fully explore their economic potential; it means that there are no real incentives for states to become involved in mining because taxes and royalties do not accrue directly to states but to the federal government. This grossly limits the capacity of states to boost their internally generated revenue. There is a broad consensus that this arrangement requires reform. A key objective of such envisaged reform would see the transfer of mines and minerals from the exclusive legislative list and therefore exclusive federal jurisdiction to the concurrent legislative list where states can exercise greater jurisdiction than is presently the case. Notwithstanding these constraints, and while we continue to advocate for greater decentralization of economic levers as contained in the APC manifesto, states still have latitude to work within or around the current institutional parameters. For example, states can set up mining joint ventures, special purpose vehicles that couple federal interest with private investment and regional investment concerns.”
The bitumen map of Ogun State is available. A copy of the map was deposited with the Bitumen Project Implementation Committee (BPIC), headed by Professor Julius Ihonvbere, who I served as his Media Aide, during his tenure as Chairman of the BPIC. 50 kilogrammes of bitumen was taken from Ijebu East to Scotland by the Ogun State team which included one of our present party leaders, Chief Pius Ogegbo. Mepro, a bitumen exploring company that was visited in Scotland used what it called TOR technology to certify that the sample was okay.
Fayemi bemoaned that “Our fixation on crude oil has blinded us to the immense scale of riches we have in this sector and their potential to power a new age of economic growth.” The Minister has hinted that the Federal Government is set to commence bidding process for prospective investors to explore the vast bitumen deposit in the country. The financial institutions are also being contacted for the establishment of an intervention fund. He added that: “priority will be given to investors that would build processing plants. The processing plants will boost local production, which will in turn, help us meet local demands and create job opportunities for our youths.”
The ball is now, evidently, in the court of Ogun State Government.
. Oladunjoye writes from Ijebu Itere in Ogun State.