Sanya Adejokun
That experts and analysts have joined voices with politicians and ordinary folks on the urgent and present need to diversify the economy since President Muhammadu Buhari took office on May 29, 2015 is nothing new. That prices of crude nosedived suddenly in mid 2014 and has not recovered since thus putting serious pressure on the finances of the federation of Nigeria, sun-national governments, corporates and individuals is also nothing new in the history of Nigeria. Also the fact that every Nigerian realises the importance of diversifying the economy away from crude to agriculture, solid minerals, manufacturing, information and communication technology, tourism and the arts is a notorious fact. And again the fact that since the end of civil war in January 1970, nothing has been done despite promises, lamentations and action plans is most glaring.
The day of reckoning is here however, and the country must look for other sources of revenue. The solid minerals sector is a very good place to begin this search. And it is upon the shoulders of Buhari that destiny has trusted the responsibility of finally doing something about the situation of underdevelopment and its resultant effects plaguing Nigeria. Buhari emerged leader at a time when patience is running rather thin particularly among youthful population said to be at least 75 percent. With United Nations estimating the country’s current population to be 181 million, many people recognise that jobs must be created by all means.
Reliance on extractive sources for development and revenue has proved to be a curse for most developing countries as very few of them have been able to utilise such resources for the betterment of the majority of the citizens. Unfortunately, Nigeria’s situation dictates that every available sources of income must be exploited for the urgent needs of the country. Solid minerals sector, because of its potential to rake in quick cash is one of those available and attractive sources.
No wonder Buhari named Dr. Kayode Fayemi, said to be one of his first eleven the minister in charge of Solid Minerals and even supported him with an experienced politician and administrator, Alhaji Bawa Bwari as Minister of State. Fayemi was the Director of Planning and Strategy, Buhari Campaign Organisation. He is reputed to have authored the campaign materials of the then Presidential candidate.
Diverse available minerals
Data shows that Nigeria is endowed with over 400 solid minerals, with over 40 of them available in commercial quantities. These include barite, gypsum, tin, limestone, bismuth, marble, gold, coal, silver, bitumen, gem stone, talc, copper, kaolin, uranium among others. Some have estimated that the country could earn up to N8 trillion annually from gold alone. And their distribution is about even, with no state having less than two viable minerals.
In fact, a report by Wardell Armstrong in May of 2007 indicated that there is documentary evidence to show that not less than 75 solid minerals of economic and commercial relevance abound in Nigeria. According to the report, economic minerals like coal, bitumen, iron, gold, emerald, diamond, limestone and feldspar are spread abundantly in almost all the states of the federation.
Other reports say the country has over three billion metric tonnes (mt) deposit of iron-ore; 27 billion mt of coal; 2.23 trillion mt of limestone and one billion mt of gypsum.
The first advantage to be derived from opening up the mining sector is immediate creation of millions of additional new jobs in a country where unemployment has become a pandemic waiting to explode. South Africa is an example of how a country can tap the potentials of solid minerals to develop the economy and create jobs.
Potentials
A recent World Bank report has affirmed that Nigeria’s solid minerals sector has the potential to match or even outstrip crude oil as revenue earner. Another document released during a recent stakeholders conference in Abuja, suggests that Nigeria could potentially earn $50 billion a year from its solid mineral deposits if necessary framework is put in place to harness the resources. Presently, the sector contributes a paltry one percent to the GDP.
The country needs a clear policy framework to create an enabling environment for the exploitation of solid minerals. Government should study and address the problems in the sector. Fortunately, has declared that the ambition of the administration was to become a leading global in the sector. He said 44 key minerals is located in about 350 locations in the 36 states but identified poor management in the last 55 years of independence as the reason why Nigeria had not got enough return in terms of foreign exchange, investment and job opportunities in the sector. According to Fayemi, solid minerals and agriculture are very dear to the heart of President Buhari in his plan to widen the nation’s income base and provide employment opportunities to Nigerians. He insisted that nothing will be spared to restore vibrancy to the sector.
Even then, stakeholders have spoken about the necessity to amend the 2007 Mining and Mineral Act, which gives the Federal Government the exclusive right to exploit mineral resources throughout the country. Actually, a mining expert told Economic Confidential that the other major impediment is the Land Use Act (1978), which vested the authority over all lands in state governors. This have ensured that this vital sector was only moving at government’s snail pace, denying it the entrepreneurial skills of the citizenry, who could be better motivated if they are allowed to own the mines and pay royalties and taxes to government.
They argue that since devolution of powers and entrenching true federalism are cardinal objectives of the All Progressives Congress (APC), Act should be amended to make mining concurrent, so that states can also exploit minerals in their domains.
They also complained about the scourge of illegal mining which has become commonplace, and the poor funding of the sector including social and political instability. Here however, even the new minister promised hard times for illegal miners as he was ready to invoke extant laws to bring them to justice. He said Buhari had given a marching order to rid the sector of illegal mining and generate more revenue into treasury.
A frontline mining consultant and one-time coordinator of the World Bank-Assisted Sustainable Management of Minerals Resources, Mr. Linus Adie decried the near state of neglect which the sector has found itself in Nigeria. According to Adie, the economic potentials lying untapped in the solid minerals sector are enormous, and can completely transform the economic fortunes of the country.
“With dedicated funding and strict supervision of the sector, developing our solid minerals sphere is capable of elevating the country’s economic status beyond imagination.”
Unfulfilled dreams
Adie recalled that in 2005, government secured a $120 million concessionary loan from the World Bank to develop the solid minerals sector, which he coordinated. “The Sustainable Management of Minerals Resources Project (SMMRP) was one of the best things to have happened in the solid minerals sector. The first thing we did was to come up with baseline studies of the field and offices and then identify areas of intervention. We introduced the mining code and then did a study of the fiscal regimes that were competitive with other countries in the world. Unfortunately, nothing much has been achieved since the launch especially as it concerns contribution to GDP and job creation, as well as exportation potentials. Crude implements of artisanal and small-scale miners, illegal foreign miners and most unfortunately, environmental degradation, ill-health and preventable deaths in local mining communities have continued to hold sway.
Statistics show that the country has about 210,000 miners of which 90 per cent are currently informal, and according to the Nigerian Gross Domestic Product report of the National Bureau of Statistics, the contribution of mining and quarrying to the nominal GDP in the third quarter of 2014 was recorded at 10.26 per cent. This, according to stakeholders, can be considerably improved upon.
Mr. Ndubusi Nwegbu, Director-General of the National Geological Survey Agency (NGSA) said “In terms of the upliftment of the general economic standard of this country, mining holds the key. It may not be to the extent of crude oil, but we can go very far. But most importantly, in terms of employment generation, it will definitely surpass that of oil.”
Adie canvassed the establishment of a special fund. He said government should set up a “dedicated fund if we wish to develop the sector. Government needs to set aside funds to revamp the sector; making budgetary allocations alone won’t be of much help as there would be the regular political interference coming to bear.”
Fortunately, former Minister of Mines and Steel Development, Architect Musa Mohammed Sada commenced a number of activities aimed at getting Nigeria a sector-oriented, globally-attractive mining regulation document. He upgraded the Mining Cadastre Office, an agency responsible for granting and administering mining titles in an objective, efficient and transparent manner.
Professor of Mining Engineering, Olaniyan Zacheus Opafunso of the Federal University of Technology Akure (FUTA), also called for the creation of a solid mineral market, which would facilitate the growth of the sector and increase earnings, especially for small scale miners. He said “the federal government should create mineral buying and selling markets for small-scale miners. If properly managed, the markets can generate a large proportion of earnings from artisanal and small-scale mining. Also, mining consultants and mineral property agents must be involved. These agents will facilitate the growth of a thriving minerals industry in Nigeria.”
Also contributing to the debate on moving the sector forward, President of the Miners Association of Nigeria (MAN), Alhaji Shehu Sani said although facilitating the growth of a thriving minerals industry is desirous, it would not be complete without removing bottlenecks such as the illegal activities of foreign miners. “As far as mining in Nigeria is concerned, it is open to different players, some of them international players. This is because Nigeria, like most mining nations, is interested in attracting foreign investments. As such, encouragement is given to these foreign mining companies. “However, some of them come with questionable motives. They simply come to study government’s weakness in mining regulations, obtain exploration licences and start mining without legal mining permits. This is unacceptable,” Sani declared.
Some other stakeholders summarised what the new helmsmen at the Ministry of Solid minerals Development should do to ensure that the sector begins to contribute significantly to the economy include: addressing the lack of synergy between states and the Federal Ministry of Mines and Steels; address the inadequacy and incompetence of the personnel in the Federal Ministry of Mines and Steel Development; create a relationship between mining host communities and the ministry; remove from the exclusive list, so states can be able to regulate mining activities in their domain and; ensure that there’s strict adherence to laws guiding environmental pollution and degradation in mining communities.
In addition, the Federal Government should: strictly enforce the rules and regulations guiding mining activities, specifically artisanal miners; work with Global Rights, an international human rights capacity-building organisation, that has a vast experience in touring and bringing awareness to the plight of residents of mining communities; ensure that Environmental Impact Assessment is carried out before mining licenses are given to artisanal miners; breathe life into the Mineral Resources and Environmental Management Committee in all the states of the federation and; set up a mechanism for the training of community heads, education of artisanal miners, vetting of licenses and monitoring of mining activities.
