For very obvious reasons, His Majesty, the handsome young King of the Royal Bafokeng Nation of South Africa, Kgosi Leruo Molotlegi, received a rousing applause, after his presentation at the recently held Nigeria Mining Week organized by the Miners Association of Nigeria in partnership with iPAD Nigeria and PwC. His presentation was on the example of a local community participating and benefiting thereof from Mining activity on their land. And what an example the Bafokeng Nation is and one from which Nigeria has a lot of lessons to learn as we continue to struggle with issues around resource control, revenue derivation and the resource curse especially in the oil rich Niger Delta.
The Bafokeng Nation might not ring a bell to many Nigerians but it should. This community which has one of the world’s largest deposits of Platinum first got the attention of the world during the world cup in South Africa when it hosted world cup matches in a 39,000-seat stadium built by the community as part of its infrastructural development – a move by the visionary young king who is noted to have said of the stadium project, “Let’s build this thing for the future”. Also built along with the stadium is a sophisticated sports complex that was the base for English team during that World Cup.
The sports facilities are just one in a long list of infrastructure and other forward thinking initiatives of this community which stands as an example to the rest of the whole world. The community is of just about 150,000 on a land area of 1200km2 in the North West Province of South Africa. Under the young and very visionary King, the Bafokeng is utilizing proceeds from the resources in its land to reverse the resource curse or ‘lottery effect’ that has brought corruption and hardship to many African nations rich in gold, diamonds, oil, platinum and other natural resources but with not much to show for it.
In the last decade, the Royal Bafokeng Nation has gathered a financial asset value of USD 4 billion. This includes a 13% shareholding in Impala Platinum, the major company operating in the area, a majority shareholding in the community owned platinum mining and refining company, The Royal Bafokeng Platinum, and a shareholding in various other sectors including financial services, telecoms, property and transport sectors.
The community believes that the key to enabling sustainable and productive social change lies in long-term and evidence-based planning. They have developed a strategic blue-print for their overall economic and social development including PLAN 35, and a Masterplan for the built environment which extends beyond the Bafokeng Nation to the wider Platinum Belt.
Central to the community’s success is transparency and a proper governance structure. All Royal Bafokeng Nation resources are held in a Trust on behalf of the Nation as a whole and their investments are managed through a wholly owned investment company, Royal Bafokeng Holdings, possibly the most successful community-owned investment company in the world. This means that no individual has decision-making power in how the Nations collective resources are used. The Royal Bafokeng Administration has spent over USD 700 million on roads, utilities, schools, clinics and other public amenities in the last decade and employs around 400 people.
King Leruo says he wants to preserve that fortune against the day when the platinum is depleted, so he relies mainly on interest and dividends to finance development.
In his talk at the Nigeria Mining Week, King Leruo advocated for among others, community ownership of their land, ownership of equity stakes by mining communities, in the companies operating in their land and the need for enabling legislation to make this possible. In addition, institutions and governance structures that promote transparency must be instituted in such communities to manage the earnings, invest in other sectors and ensure that the people from whose land such resources are earned continue to benefit from it long after mining activity might have ended.
The Bafokeng Nation’s success story is one that stands out as a shining example from Africa on what is possible with the right leadership even at a community level. Very often, the Sheiks in Abu Dhabi and Dubai are cited as examples of visionary leadership. Here we have ours, and one that relates more to our current circumstances.
Communities in the oil rich Niger Delta of Nigeria are among the poorest in the country with severe environmental degradation which has seen to continuous agitation and unrest in the region. Communities with rich solid mineral deposits (even when serious mining is yet to take off) are already suffering for outbreaks of poisoning and environmental degradation from the activities of illegal miners and there are reasons to worry that not being a nation that learns from past mistakes, we are set to repeat the same mistakes we made with oil in this sector.
For the most past we see a complete disconnect (and absence of trust) between the communities, their traditional leadership and the state. The people appear not to have any stake whatsoever in the value chain. Then there is the Land Use Act to also contend with. The 13% derivation and the NDDC has hardly changed the fortunes of the oil producing communities and the entire nation continues to be the brunt of decreased oil production even in challenging times almost like a classic case of “the child that says his mother will not sleep, will also not know sleep”
It is time to try something new. Where laws have to be reviewed they should. Where new laws should be enacted, we should enact them. Overall we need a paradigm shift from what clearly hasn’t worked to something more effective which ensures that the people from whose lands these resources are gotten benefit immensely from it and that the entire nation as a whole is better for it. We should be sending teams to the Bafokeng Nation to learn how they did it.
First published here on Nov 1, 2016