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Kayode Fayemi, minister of mines and steel development, says a lot of overhauling exercise is ongoing in Nigeria’s mining sector with a view to driving both local and foreign investments towards the sector, saying over $25 billion is anticipated from the sector in terms of gross domestic product by the year 2026.
The minister stated that various institutional reforms, which include financing and fiscal incentives, legal and regulatory certainty, geosciences prospectivity, infrastructural support, sector governance, stakeholder engagement, among others, were being undertaken by government to re-position the industry.
Delivering a paper entitled, “The Non-Oil Sector as a Sustainable Alternative in Enhancing Revenue Generation” at the recently concluded National Council on Finance and Economic Development (NACOFED) held in Abeokuta, the Ogun State capital, Fayemi said economic opportunities were abound in the sector.
The minister, who said financial institutions were usually reluctant to finance the sector’s fixed assets and working capital, requested both federal and states ministries of finance to improve the attractiveness of the sector by placing zero tariffs on equipment imports and reduce varied taxes levied on mining investment.
While explaining that “a key part of tackling infrastructure deficits is to allow mining companies to co-fund such infrastructure as is the case globally, the Minster disclosed that the Ministry “is establishing the Nigerian Solid Minerals Investment Fund, structured as a private sector-oriented investment mechanism to provide longer-dated financing to private sector-led projects in the mining sector.”
He said, “Should Nigeria successfully implement the proposed recommendations, growth is expected to return to the sector in the form of new exploration activity, operations and production from active mining, functional (and expanded) processing and refining capacity, and higher value-addition in exports.
“The net outcome will be the creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs. We anticipate contribution to mining GDP to exceed $25 billion by 2026 as industries are better able to use the output of the sector, substituting for imports.
“Analysis conducted by major stakeholders in the solid minerals sector, the Association of Metal Exporters of Nigeria, also indicates that we can generate at least N5 trillion annually from mining and exporting of its vast solid minerals deposits.”
Fayemi, however, requested state governments to work with the Federal Government in order to achieve the designed blueprint on Nigeria’s mining sector, saying: “we realizes that in order to give you good reason to work with us, we need to create avenues for a greater degree of financial participation and revenue sharing.
“It is therefore my pleasure to announce to this august audience that state governments are now beneficiaries of thirteen percent (13%) derivation from mining revenue. This is a significant shift, that signposts our commitment to facilitating a win-win situation for all stakeholders.”
