The federal government in 2013 established the Solid Minerals Development Fund (SMDF) with the aim of ensuring that the sector becomes a revenue generating sector in tandem with its oil counterpart. Ruth Tene Natsa writes its achievements so far.
In 2013, the then minister of mines and steel development, Musa Sada, inaugurated the SDMF, explaining that in accordance with Section 37 of the Nigerian Minerals and Mining Act 2007, the fund will consist of any sums appropriated for solid minerals development under the Revenue Act or any federal law.
He further revealed that “the fund will also include any sums appropriated for solid minerals development under the small and medium industries equity investment scheme (SMIEIS); any funds received as grant, donations, foreign loans, bonds and long term swaps; and any sums appropriated to it by the federal government budgetary allocations.”
Sada tasked the board to source funding for “the development of both human and physical capacity in the sector; funding for geo-scientific data gathering, storage and retrieval to meet the needs of private sector-led mining industry; equipping the mining institutions to enable them perform their statutory functions; funding for the extension services to small and artisanal mining operators; and provisions of infrastructure in mines land.”
He did not, however, disclose how much the fund was given as a take-off grant, explaining instead that the resources for the fund are expected from sums “appropriated for solid minerals development under the Revenue Act.”
Two years down the line though, not much has been heard about the fund and its contribution to the sector that has continued to cry over poor funding and lack of infrastructure. In an exclusive interview with the president of the Nigerian Progressive Miners, Mr Sunday Ekozien, he said the fund was a booby trap bound to fail from the onset. He was of the view that the fund would fail because some of the people in charge of it lacked the capability to make a success of it.
“The way I look at it is that the fund is predictable and was programmed to fail because of the crop of people mandated to manage it. With such people in the helm of affairs, it was destined to fail. You don’t expect such people to manage such funds based on the funds objectives. In assessing them to know their abilities to manage the fund, one needs to look at what had they succeeded in achieving prior to their membership of the board. But this was not done, rather their appointment was done following the usual the way things work in Nigeria. But it is not possible to do the same thing over and over again and expect different results,” Ekozien said.
He noted that the fund itself was a fantastic idea based on Clause 34 of the Minerals and Mining Act, noting that it is an intervention fund to help provide funding for long term exploration and exploitation which was why, he said, they fought for it. He stated that the problem is that people play politics with issues that they shouldn’t play politics with and this, according to him, is what is militating against the fund.
Ekozien noted that the fund had been allocated budgetary allocations in the past three years but did not yield any results because people placed to run the fund lack ideas as they only work for their selfish interests and pockets alone rather than for the interest of the sector. He maintained that a major challenge to the development of the sector was the fact that there was a cabal in the solid minerals sector which hindered the development of the sector.
Another stakeholder was of the opinion that while the SMDF had been created to seek funds for the development of the sector, the board members had failed in that regard because of the calibre of members that were involved. The stakeholder maintained that while some of the members were of high standing and would have made the sector proud, they were paired with people of less pedigree that would not have encouraged foreign investment in the sector.
“The board has not been useful because it has been hijacked by the ministry instead of being allowed to be independent. How can you bring somebody who does not have knowledge of the sector and expect them to work well. For the sector to achieve development, the government must be ready to take part of the investment risk,” he argued, observing that “when the sector is reformed, especially on mining titles, you tell people that it is free and that would encourage people to come in. But after two years you can charge them heavily to continue using it rather than adopting the “Use it or Lose it” principle currently being practiced.”
Source : Leadership