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The Federal Government is easing the way for investors wishing to participate in Nigeria’s solid minerals sector through intervention funding, enhancing governance frameworks and launching a crackdown on illegal miners, to achieve a projected growth of N141billion by 2020 as stipulated in the Economic Recovery and Growth Plan (ERGP).
Investors will benefit from the N30billion in funding, known as the Solid Minerals Development Fund, to accelerate development of the sector. The World Bank has also instituted a $150million in funding and there are now financing schemes being implemented by the Nigerian Export and Import (EXIM) Bank for the solid minerals sector.
Last week, Kayode Fayemi, minister of Mines and Steel Development, inaugurated a board of Solid Minerals Development Fund (SMDF) tasked with designing an appropriate governance structure and strategic framework for effective management, which would promote the establishment of Special Purpose Vehicle (SPV) facilitator Funds and work with investors to establish its governance and financial structure.
Chaired by Uba Saidu Malam, the board also includes Fatima Shinkafi (Secretary and Head of Secretariat); Ademola Gbadegesin; Theo Iseghohi; Samuel Ogbu Eze; Uwatt Bassey Uwatt, (Corporate Member representing the Central Bank of Nigeria) and Yinka Mubarak (Corporate Member Representing Bankers Committee), many with proven expertise.
Operators have called for the articulation of a clear plan by government, to address governance, regulatory and technical frameworks, to formalise artisanal mining, common in rural areas around the country.
“Many people collected the leases and licences and keep them without allowing serious investors’ access to the rights, making many mining sites to remain unexploited,” said Bello Yahaya, chairman of Goldmines Nigeria.
Fayemi says the board will resolve these issues. “The competent team of seasoned professionals on the board, will inspire confidence and trust from other stakeholders they would be working with. Their wealth of experience and networks would be brought to bear on this job, towards achieving the desired results.”
In addition to these, the ministry of Mines and Steel Development is launching a crackdown on illegal miners operating without license in the country. It is currently prosecuting a case of a Chinese miner suspected of illegal operations. Dozens of arrests have been made since last year.
Fayemi said a six-month deadline from April has been set to stop the exportation of raw solid minerals from the country. Nigeria sold N18billion worth of solid minerals in the last three months ending, December 2016.
Analysts at PwC Nigeria, who advise the ministry, said “There are now enormous opportunities and potentials for companies who are focused and willing to be part of the new developments in the sector.”
After almost four decades of informal operation, characterised by lack of reliable geological data, shortage of skilled labour, poor access to funding, prevalence of artisanal mining activities, weak infrastructure, pervasive corruption and environmental degradation, Nigeria articulated a policy road map for the sector in December 2015.
The policy blueprint seeks to create a globally competitive sector, capable of contributing to wealth creation by using mining assets to drive domestic industrialisation initially, and then migrate to global markets through a value-chain based growth plan.
Sub-Saharan Africa’s largest economy is turning the corner, producing 43.5million tonnes of solid minerals in 2016. Data from the National Bureau of Statistics (NBS), a government agency which provides information for economic planning, said coal mining and metal ore activities in the sector continued to record strong year on year growth rates of 19.28 percent and 64.60 percent respectively.
“Quarrying and other metals also had a significant growth rate of 94.46 percent from 22.30 percent in the fourth quarter of 2016. The mining and quarrying sector contributed 8.27 percent to overall GDP in the first quarter of 2017, higher than the contributions recorded in 2016 first quarter and fourth quarter of 4.02 percent and 6.70 percent respectively,” says the NBS.
However these are modest gains, considering that the Nigerian Minerals and Mining Act has been in place since 2007, yet growth and contributions to GDP accounted for about N400billion, or 0.33 percent as at 2015.
“There is however a lot more ground to cover,” said Fayemi at the board inauguration ceremony, held at the ministry’s conference hall in Abuja on March 25. Fayemi further said that the inauguration of the board marked an important milestone in the efforts of the present government in repositioning the Nigerian mining sector.
ISAAC ANYAOGU
