High expectations have been placed on the unfolding and development of the solid minerals roadmap since President Buhari’s administration announced its diversification plans, with the minerals sector playing a key role. Ruth Tene Natsa writes on the expectations of Nigerians as the administration clocks one year in office.
Stakeholders in the Nigerian solid minerals sector have expressed optimism that the sector, through the leadership of president Muhammadu Buhari, is set to release a people-centred development.
While they have lamented the slow pace of achievements in the sector, the stakeholders have also expressed great optimism that for the first time the ministry has a people-centred programme which has the interest of miners, the Nigerian government, international organisations, among others, at heart.
“To be fair to the present government, there are genuine intentions to hasten development in the sector, but as to achievements we still have to wait a little,” the president, Miners Association of Nigeria, Alhaji Sani Shehu, said.
The miners president who spoke in an exclusive telephone chat with LEADERSHIP said that his optimism “to wait a little while to see the results is because the Buhari/Fayemi administration has developed a people-centred roadmap. The initial roadmap was for government but the current one is people-centred with inputs from experts, miners and international organisations. The minister has been able to produce a people document.”
Shehu maintained that what was left was the implementation so that mining can stand up, as the sector is still down.
“We hope that we will see something that will have a positive impact on the nation’s economy before the end of the year,” he said
The minister of solid minerals development, Dr Kayode Fayemi, during his inaugural media briefing in Abuja, had said that the team, through some short term actions, was set to accelerate investor confidence in the mining markets and get the sector growing and jobs created among several others.
He said, “We have reasons to believe that available data of our reserves understates that the almighty God has blessed our country in many ways,” implying that Nigeria has got more minerals, and in much larger quantity, than the nation has record of.
Aside the fact that Nigeria has been affirmed a mining destination with over 44 minerals spread across the various states and communities of the nation, Fayemi had assured that the ministry will take several steps, including finalising market and technical diagnostics through creating a consistent mining industry, revenue generation through upgrading the Mining Cadastre Office and efficient reviewing of overlapping and ineffective mining titles, strengthening the institutional support given to the artisanal and small scale miners (ASMs), finalising privatisation exercise through an audit of privatised assets in partnership with the Bureau of Public Enterprises(BPE), ensure capacity building and form a business and investment support team among others.
The minister, who spoke based on current data, stated that the sector made up about 0.34 per cent of the gross domestic product (GDP), noting that based on current official rates, the mining sector contributes N400 billion to the economy, and was optimistic that the sector can create double digits in the next decade with important direct and indirect economic impacts on households.He assured that this can be achieved using emerging federal mining strategy which focuses on aspirations (to build a sustainable global mining sector), a where to (focus on supporting and growing Nigeria’s position in mineral assets with commercially proven reserves) and a how to win (Nigeria will focus on going to the market as a quality and cost leader).
Meanwhile the 2013 Solid Minerals, Oil and Gas Audit released by the Nigeria Extractive Industry Transparency Initiative (NEITI) in Abuja, recently revealed that despite the abundance of solid minerals in the country, the country realised only N33.86 billion from the sector in 2013. Speaking on the reasons for the low contribution, the 2013 Report had revealed that of the 619 companies that made payments to the government in 2013, the audit was able to reconcile payments made by only 65 entities, representing just over 10 per cent of the active players in the industry. According to the NEITI report, the 65 companies were those that made payments of N2 million and above to six government revenue collecting agencies involved in the sector, including the Federal Inland Revenue Service (FIRS), Mines Inspectorate Department (MID), and Mining Cadastral Office.
The report also showed that payments from the solid minerals sector were not well dispersed with cement manufacturing companies taking a clear lead. For instance, five cement companies, namely Dangote, WAPCO, Ashaka, UNICEM and CCNN, accounted for N30.47 billion of government revenue or about 93 per cent of the reconciled payments. A breakdown of the revenue distribution showed construction companies contributing N1.98 billion and mining and quarry companies, N1.42 billion.
Meanwhile, Fayemi,worried that one of the reasons the sector had produced below expectation in the past was as a result of the low investment placed on exploration as he noted that in the past two years, Nigeria had spent less than $500,000 on exploration activities considering the huge resources and huge expanse of geo data the nation had to contend with. He had listed both external and internal factors among the challenges, noting that the global decline in the prices of mining products has put mines and mining houses under tremendous pressure as top mining houses also withdraw from investing in the sector. In spite of this, the minister is optimistic and sees an opportunity to jump start the market growth using a mix of domestic mining houses, junior mining companies and global miners, particularly with the domestic demand for industrial minerals and metals, particularly in the construction industry, focusing on working with other MDAs.
He maintained that the internal challenges are of a different nature, not of a supply demand issue but rather of limited, and, in some cases, none existing infrastructure (roads, rail, power), insufficient data (with existing geological data dating as far back as 50 years with no updating/upgrading), limited cooperative federalism (seen in the absence of incentives for states to become involved in mining as taxes and royalties are not available to them) as well as low productivity.Other challenges, he maintained, include the activities of illegal miners and community challenges as most of Nigerian mining is done illegally at levels as high as 80 per cent, weak institutional capacities, insufficient funding.
He said, “funding has been a challenge, partially because the sector has not been a focus area for both government and financial institutions. Over the past five years, for example, the total capital allocation to the ministry and its agencies in the federal budget had been less than N10 billion and out of the N1billion allocated in 2015, only N352 million was released. Equally, access to finance has been practically non-existent from the banking industry.
Source : Leadership