FG targets over $25bn GDP from mining sector in 10 years

Minister of Solid Minerals, Kayode Fayemi, on Tuesday unveiled the 10-year strategy of the present administration for the development of solid minerals sector with the plan to achieve over $25 billion contribution to the country’s GDP by 2026.

Fayemi, who bemoaned the long neglect and lack of operational data for the solid minerals sector, noted that Nigeria remained a leading country in coal deposit and endowed with huge deposits of industrial minerals, energy minerals like bitumen; metallic ore minerals such as gold, cassiterite, etc; construction minerals as well as precious stones.

According to Fayemi, analysis conducted by major stakeholders in the solid mineral sector under the aegis of Association of Metal Exporters of Nigeria indicates that about N5 trillion annually can be generated from mining and exporting of its vast solid mineral deposits.

While emphasising the need for improved budgetary allocation to mining sector, Fayemi disclosed that discussions were ongoing with Revenue Mobilisation and Fiscal Allocation Commission to ensure that states benefit from the 13 percent derivative fund and incorporate this into revenue sharing arrangement.

“Be it as it may, in 2015, the sector contributed approximately 0.33% to the GDP of the country. This contribution is a reversal from historically higher percentage of about 4-5% in the 1960s – 70s. Our policy goal is to return to a contribution level of 5% – 7% over the next 10-15 years, and the recently approved Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) is very supportive of that aspiration,” he stated.

In the bid to achieve the feat, the Minister who spoke at the Sectoral debate on Solid Minerals’ organised by the House of Representatives, unveiled plans for the establishment of intervention funds for the development of Agriculture and Solid Minerals sectors as part of efforts geared towards realisation of the diversification of the nation’s economy.

To this end, the Ministry is collaborating with Central Bank of Nigeria (CBN), Bank of Industry (BoI) and other commercial banks to ensure access to fund.

In the bid to maximise the huge potentials in the sectors he emphasised the need to boost exploration activities, noting that “in 2015, Burkina Faso spent $150 million, Ghana spent 120 million while Nigeria spent $300 million on exploration.”

Fayemi, who harped on private sector driven sector, stressed the need to facilitate investment into bulk handling terminals, railroad and rolling stock capacity, technical and engineering capacity, regulatory reform, reorganisation of the Ministry itself and expansion of access to financing to drive sector transformation.”

He also emphasised the need for the review of extant laws including: Mining Act and Land Use Act with the view to avoid unnecessary federal-state competition in the bid to fast-track the granting of Certificates of Occupancy and the lacuna involved in issuing community and land owner consent.

Under the current reform, the Buhari’s administration is expected to “rebuild market confidence in its minerals and mining sector and win over domestic users of industrial minerals that are currently imported. During this phase, Nigeria will also seek to expand use of its energy minerals. This phase will likely last about 2-3 years.

“Nigeria will focus on expanding domestic ore and minerals asset processing industry. This phase will last about 5 to 10 years. For phase 3, Nigerian should seek to return to global ore and mineral markets at a market competitive price point. We expect this coincide with the next Commodity upswing,” Fayemi told the lawmakers.

In his contribution, Leo Ogor, Minority Leader canvassed the need for immediate review of extant laws that empowered the Federal Government to control solid mineral resources in the country.

Ogor, who said that the review of the current laws would promote the involvement of state governments in solid mineral exploration added that it will also encourage diversification of the country’s economy.

“Things have to be done differently. State laws and the federal laws have become a major challenge so I think the first point that we need to lay foundation on is how we can amend or find other means of removing these laws.

“And I draw reference to section 44 (3) of the 1999 constitution that placed all mineral resources in the hands of the federal government.

“If you look at the situation we have today in this country we have created a situation where people come hand in hand with the tiers of government sharing money on monthly basis.

“We have abandoned the whole agricultural sector, cocoa and palm oil production instead we come together and share oil money and look at the situation we have found ourselves.

“I believe the starting point is to make sure that the provision of section 44 (3) of the constitution is totally deleted from the constitution because automatically it places the whole responsibility on the shoulder of the Ministry. If you ask me the federal government has no business controlling the solid mineral resources of the country.

“Various state governments should control these resources and bring the tax paying arrangement to the centre; it will create room for people to look inwards towards diversifying the economy.