N128bn 2020 revenue record: Shaping Solid Minerals Industry for more economic contributions
The call for diversification of Nigeria’s economy is no mean course in recent discourse of the profile of the Country’s economy. The wobbling state of the economy with vagaries of currency value instabilities, forex scarcity, recession, high inflation, and the associated deformities, have brought to fore the submission of diversifying the base of the economy from the monocultural oil dependent status. The call for diversification seems to be the most resounding recommendation given widely as a panacea to pull the economy out of the mire of deformities, informed by the deficiencies associated with the vagaries of oil prices. The overwhelming dependence on oil has come with disadvantages owing to the instabilities of global oil prices which remain a critical base upon which the economy is structured. This has seen the economy suffering inconsistencies of sprouting circumstances which have made growth unstable and uncoordinated.
As the resonance for diversification gains momentum, moving to develop other sectors where the Country has competitive strength with huge economic potentials, has become a rational course. The background orientation would be to develop responsive sectors, as base-structures upon which the economy can spread its net. One sector, among others, which has remained on sight of reckon towards this purpose is Mining.
Nevertheless, as much as the sector houses depths of mineral resources which have been validated to hold huge economic potentials for the Country, the need for special interventions is sacrosanct. This is just as the prevailing orientation informing the working fabrics of the sector are still largely infantile, very crude in nature, and ill-defined.
The need for coordinated policies is still very much a necessity to shape the sector into form. Of such are those bearng relevance to attracting legitimate investors into the sector, while encouraging subsisting operators to expand. While certain policies towards this direction have been noted, yet on a gross notation, they are still infinitesimal to the desideratum. Minister of Mines and Steel Development, Arc Olamilekan Adegbite, had over the weekend, assured artisanal and small scale miners of accessing loan facilities up to N100 million to boost their productivity. Adegbite who gave the hint during his inspection of the ongoing construction of Gemstones Market in Ojoo, Akinyele Local Government Area of Oyo State, had urged miners to form cooperative groups that would qualify and enable them access the loans the government will facilitate for them. According to him, such cooperatives will access loan ranging from N2million and N100 million, which they will repay in 15 years at five per cent interest rate per annum. The modalities, according to him, entails that a loan of N2million and below would only require a guarantor, while a miner seeking to access a loan above the sum of N2million would need to provide required collateral. “I realised that a lot of people could not access the money because of collateral and I advised that it be reduced so that those who need small loan of not more than N2 million can access without a collateral but a guarantor of level 14 and above in the civil service,” he was quoted.
Ongoing construction of Gemstones Market is one intervention, which has been noted to bear huge potentials to further increase productivity in the sector, if well expanded with coordination of the proper working parameters. According to Adegbite, operation in the market would see gemstones sorted, identified and graded, including cutting, polishing, and making them ready into jewelry. The Minister had mentioned that capacity building of persons in the gemstones and jewelry industry is ongoing in Federal Capital Territory, Abuja, and most of them would move into the market in Ibadan including the Gold Souk in Kano, since they would be engaged in jewelries and gemstones production for local and international markets.
Establishment of regional mineral processing clusters has recently been taking course as moves of development interventions in the sector. Such clusters have been noted to bear advantages of improving productivity, boosting confidence and discouraging export of raw ore. According to the Minister, Federal Government’s mineral cluster projects in the six geopolitical zones indicate efforts to woo investors into the country’s solid minerals sector, and also the facilities would provide a conducive atmosphere as far as ease of doing business is concerned.
“By the time these projects are completed, we are looking at the system of Public Private Partnership, PPP, where we have facility and plant management systems in place who will run this projects and of course there will be recourse to government as appropriate but we don’t want to get government involved in the running of the six clusters. It is going to be a win-win business, whoever runs any of the projects will make money from it, will make money for government and also enhance the value of what is produced in that particular neighborhood,” he was quoted.
Interventions in the sector may appear to be bearing their impacts, though not as would be expected. Audit report of the mining sector by the Nigerian Extractive Industries Transparency Initiative (NEITI) has revealed revenue from the solid minerals sector to the Federation Account rose by 54 percent in 2020 to N128billion compared to N75billion recorded in 2019. NEITI in a statement by its Head, Communications & Advocacy, Obiageli Onuorah on Sunday, however indicated that over 2,000 companies operating in Nigeria’s solid minerals industry were indebted to the federation to over N2.76billion. NEITI in the 2020 solid minerals report stated that the companies’ liabilities resulted from failure on the part of 2,119 companies to pay statutory annual service fees for respective mineral titles. It explained that 6,010 existing solid mineral titles were valid as of 31st December 2020, while 7,605 mining titles were issued in the industry in the past five years. NEITI further disclosed that total minerals exports in 2020 were 32.99 million tons valued at $42.46million, while China with 80 percent of the total exports remained the major destination for Nigeria’s solid minerals exports. Highlights of the NEITI report showed that the sum of N8.89 billion was shared to the federating units as solid minerals revenue in 2020. Breakdown of the figure showed that the Federal Government received N4.07 billion (45.83%), states and local governments received N2.07billion and N1.59billion (23.25%; 17.92%) respectively while N1.16 billion (13%) was recorded as derivation share. Ogun, Kogi, Cross River, Edo and Bayelsa States, are known to be topping the table among States which contributed largely in the 2020 record.
Though the new development is a good omen – an increase that is welcoming – yet it’s a record still far away from the potential output accruable from the sector. The need to quicken conforming policies to, not only sanitise the sector, but also introduce interventions to boost the productivity of the sector to the height of virility with viable strength, strong enough for the economy to spread its working structure is paramount.
The prevailing situation of which the fabrics of the sector are still ridden with deficient characters of illegitimate estates has continued to pull the sector aback. The need to track and reconcile financial flows in the sector, check quantities of minerals produced, utilised and exported, pay attention to the governance and process frameworks in the sector, among others is pertinent. Coordinating policies to set the sector in tune has become necessary as the yearnings for structural responses to diversify the economy to address the pressing strains has become a necessity, and arguably a matter of emergency.
