Imperatives of Commodities Stockpiling in Nigeria

Abstract

DOI : 10.7176/JRDM/52-04 Introduction Nigeria’s development has always hinged on its natural resources. The level of exploitation and degree of development of the resources have been playing and may likely to continue to play a central role in the economic, industrial and food security status and the wellbeing of the nation (Aribisala, 1993). Prior to independence, Nigeria depends on its forest resources for perspective planning for economic development. As far back as 1899, the perspective planning for economic development was to exploit the forest resources (Adeyoju, 1975). The export revenue from forestry grows at 1%, 8% and 28.8% between 1950-1960, 1960 - 1970 and 1970 - 1980 respectively (Aribisala, 1993). At the time of independence, Nigeria depended on export of agricultural products such as cocoa, cotton, groundnut, palm oil, palm kernel, various timber species, hides and skin, processed tin ore for its foreign exchange. The development of these resources was vigorously pursued by the British trading firms and this increased agricultural production and productivity, enthrone sustainable forest resources management principles and ensure optimal mineral development practices in order to aid optimisation of export of these commodities. In the minerals sector, minerals such as tin, columbite, and coal constitute major exported commodities and intensification of exploitation activities led to discovery of oil in the 1950’s and its exploitation from Oloibiri, Rivers State in 1956. The high price commanded by oil compared to other commodities in the international market brought oil to the forefront of exported commodities, and turned farming and related activities into lacklustre activities. The petrodollars led to initiation of policies such as import substitution through the First National Development Plan, 1962 – 1968; and in 1970 – 1974; the Second Development Plan which highlighted the weakness of the import substitution strategy such as limited markets which do not allow for spread of industries, nor-allow for intermediate or capital funds (Aribisala, 1993). These made government to shift policy forms to public sector led industrialisation, and, the establishment of big linkage industries such as Pulp and Paper Mills, Fertilizer Plants, Salt Refinery, etc. Although, these postponed the restructuring and transformation necessary to make the Nigerian economy self-reliant and self-sustaining, it created the impetus for local sourcing of industrial inputs. The road to focus on the development of local industrial raw materials became imperative due to the vagaries in oil prices as the low price of oil in the international markets make importation of finished and semi-finished raw materials too expensive to the industrialisation strategy and forced the closure of many industries. Since 1980’s to the present, the nation has tossed with a privatisation scheme and a holistic programme for the development of local raw materials for use in the manufacturing sector of the economy. These led to establishment of government agencies such as the Raw Materials Research and Development Council in 1987 and a host of others. It is imperative to stress that the dependence of the nation on commodity export and industrial processing has had its toll on optimal resource availability locally. Despite government’s effort to promote industrial utilisation of locally available raw materials and the establishment of a number of presidential committees for commodities development, capacity utilisation is still low across most industries. Likewise efforts being made to promote food availability, economic and physical access to food are still facing several constraints, making it mandatory to put in place strategies that would promote improved capacity utilisation in the industries and to enhance food availability in the country.