Nigeria’s GDP in shambles with Governors’ supported illegal mining


By Moses Adeniyi


Decaying structural deficiencies in the Nigerian politico-economic system is   one major factor causing strains and creating lacunas for corruption to thrive in the Country. One manifestation of this has reflected clearly again in the trending revelation that some State Governors are the brain behind illegal mining’s across sites in the Country.

This disclosure is a subject of concern that cannot be overlooked without careful consideration of the effects such weighty absurdity is portending to the Nigerian economy. This is not to shy away from the fact that there are many structural deficiencies which has been raising illegal activities across board in the Country.

Mines & Steel as alternative revenue

This revelation is marked by surrounding controversies at a time the Country is battling the fate of dwindling foreign reserves and devaluation of the Naira occasioned by fall in global oil prices (the major source of the Country’s revenue base).

There is certainly no doubt that with the unstable price of crude oil in the global market which has been projected may fall further in future, the Country is exposed to risk of grave revenue shrink in its reserves, in as much as she continues to depend on oil which currently is valued to constitute over 90percent of her revenue base.

With the lamentable recession that greeted the Country since 2016, in the face of speedy global fall in oil price, which left Nigeria with no other option than to suffer the fate (recession), it became done on the Federal Government that it needs to fasten its belt to incorporate other sources of revenue generation in an attempt to diversify the economy.

Mining and Steel is a major industry the Federal Government has turned attention to as another source through which the Nigerian reserves can be boosted. This has attracted increasing attention paid to the industry as well as  generated controversial concerns on many grounds regarding the challenges bedevilling the industry from different quarters.

Illegal Mining Activities & Sponsors

Another balloon busted in the air when on Friday, on unanimous grounds, the Nigerian Minister of Mines and Steel Development, Mr. Olamilekan Adegbite, together with the Chairman, Senate Committee on Solid Minerals, Mines, Steel Development and Metallurgy, Senator Tanko Al-Makura, alleged that some Governors are the brain behind the illegal mining of some solid mineral resources in the country.

Among the solid minerals on list of illegal mining in different parts of Nigeria include gold, zinc, lead, tantalite, columbite, laterite and others the Minister mentioned to the Senate committee at an interactive session.

Adegbite had stressed to the Senate that the challenge of illegal mining was allegedly being supported by some state governors through the provision of police escort for unlicensed foreign miners in their domains.

In his words, the Minister had said, “You will find foreign nationals encouraged by our people. Without naming them, we have some state governments that are encouraging these (foreign) nationals that we are talking about and that is why you see them with security (operatives).

“When they send them to go and do this, they need police. What do you expect a mining officer to do when the state government is backing this illegal mining?”

In a related development, Al-makura who was formerly a governor, in a state (Nasarawa) housing several mineral resources, had described the governors allegedly aiding illegal mining, as “illegal miners” themselves.

He queried, “Why are they (governors) giving support to illegal miners? Now, the simple response or answer to that is that they are helping illegal miners because they are illegal miners themselves.

“There is nowhere illegal mining can take place without the knowledge of the community; you cannot illegally mine mineral resources without the consent and the participation of the community.”

Al-Makura advocated for a non-punitive approach to resolving the matter, which on agreement was consented to by both parties (the ministry and the Senate committee) as a subject on the exclusive list of the Federal Government restricting states’ direct development of the mining sector.

What is illegal Mining?

Illegal mining is popularly believed to be an outplay of small scale mining, but this has been proved wrong (not being what obtains). There are large scale mining adventures which are manifestly Illegal. Information gathered from experts have revealed that illegal mining takes different forms and manifest in several dimensions, not necessarily related to small scale mining alone.

According to the Director and Head of Mining Industry, PricewaterCoopers (PwC), Habeeb Jaiyeola, illegal mining cut across all mining activities that evades government monitoring and does not yield returns back to the government’s pulse.

These include, operating without licenses, operating beyond the scope of license obtained, as well scrapping activities of those who venture around for mineral resources.

According to him “the point here is that all these sources feed into the revenues going-out without the government been able to monitor their activiies.

“Some people perceive artisanal mining as illegal, but it is not necessarily correct. There is what is called small scale and artisanal mining license.

“Therefore a person can operate as an artisanal miner on a small scale, but he needs a license to do so. An illegal miner is someone who is operating without a license.

“An illegal miner can be someone who only has obtained an exploration license, but engaging in mining. With discovery of minerals after exploration, it is required that the explorer is supposed to obtain a mining license before he begins to mine. If he fails to obtain the license, he becomes an illegal miner.

“Hence, it is not only the small miners who are involved in this. It could also take the form where the license an operator obtained is only to mine gold, but arriving the site, he may discover other minerals such as Zinc, and lead among others.

“If in any case the party involved refuses to go further to obtain a license for mining these particular minerals discovered, it also becomes illegal mining.

“The category of illegal miners also covers those who scrap around for mineral resources. People misinterpret illegal mining to be activities of small scale mining alone which is not necessarily the case. Illegal mining is generally seen in the light of running mining activities without government approvals.

In the instance of an operator who only has an exploratory license and is engaged in mining, such operator  is not reporting to the government and the Mines Inspectorate  Department is not in the position to monitor him, collect his royalties, and the FIRS (Federal Inland Revenue Service) is not collecting taxes on his activities because he is not passing through the legal channel of operation.

All these activities are encumbrances not making revenues accrue from the mining industry into the government’s pulse. Thus affecting the revenue base of the Country.

Government action on Illegal Mining

The closure of land borders have been applauded by experts in the industry as a good step that will reduce the craft of carting away unaccounted mineral resources out of the Country through the porous nature of the borders.

Other policy measures asserted by experts believed will be instrumental to vitalising the industry are; strengthening licensing procedures, financial reporting and auditing standards for operators.

With the policy, an operator is expected to pay returns on his mining activities. This standard will require an operator who fails to have an explicit audit of his mining operations and fails to give appropriate return to the government over a period of time, have his license revoked to be handed over to a serious operator.

Other measures that have been asserted include; strengthening the use of lapidiaries and buying centres to mop-up minerals across regions; and bringing all the small scale artisanal miners together in a way that they can be supported to enable them run their activities in terms of providing them with the appropriate funding, tools, and training that will enable them operate optimally at the artisanal level.

Way Forward

However some observers have called for a concrete intergovernmental system that will incorporate the various State Governments in the Country into the structural system of the mining industry.

Al-Makura a subscriber of this school of thought, had called on all stakeholders to develop legal and structural measures to incorporate state governments’ participation in the development process of solid minerals.

“It then means that we must find ways, structurally and legally, to encourage state governments not to participate in illegal mining. That is only by carving a role for them. If you look at the law on mining, it is in the exclusive list.

“There is a need for us to come together – the Senate, the House of Representatives and other stakeholders in the industry to sit down and unbundle this to give every level of government some measure of participation without usurping the exclusive legislative rights.” Al-Makura advocated.

Statistics have shown that due to the infantile state of development of the industry and the activities of illegal miners, the mining sector contributes only a meager of 0.3 per cent to  Nigeria’s Gross Domestic Product (GDP),  caters  for just a chunk of 0.33 per cent of employment, and 0.02 per cent of the Country’s entire export value.

This is despite a February report of the Nigerian Extractive Industries Transparency Initiative (NEITI) that the Country is home to about 44 minerals found in commercial quantities in 450 locations across the Country.

The Agency had included the following  in the list of States where illegal mining activities are prevalent, Zamfara (4 illegal mining sites), Plateau (7); Ebonyi (5); Enugu (4); Imo (5); and Niger, (10).

According to Part I (1)(2)(3), of the Nigerian Minerals and Mining Act, 2007, the entire property in and control of all mineral resources in, under or upon any land in Nigeria, its contiguous continental shelf and all rivers, streams and watercourses throughout Nigeria, any area covered by its territorial waters or constituency and the Exclusive Economic Zone is vested in the Government of the Federation for and on behalf of the Nigerians.

All lands in which minerals have been found in commercial quantities shall, from the commencement of the Act be acquired by the Federal Government of  in accordance with the provisions of the Land Use Act.

The Act further provides that property in mineral resources shall pass from the Government to the person by whom the mineral resources are lawfully won, upon their recovery in accordance with this Act.

According to Part II of the Act, the function of the Minister are to ensure  orderly and sustainable development of

Nigeria’s mineral resources; develop a well planned and coherent programme of exploitation of mineral resources taking into account the economic development, ecological and environmental factors; monitor compliance with Community Development Agreements by industry operators.

Others include establishing the procedure for monitoring developments in the solid minerals sector and encourage the private sector investment in mineral resources development; ensure that in the exploitation of the mineral resources, an equitable balance is maintained between foreign and indigenous interest; create an enabling environment for the private investors, both foreign and domestic by providing adequate infrastructure for mining activities, and identify areas where Government intervention is desirable in achieving policy goals and proper perspective in mineral resources development, among others.

Notwithstanding, it has been asserted that incorporating the States in the structural system on a pragmatic and effective role of importance will further strengthen the viability of the industry in Nigeria.