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Promoting value addition of Nigeria`s mineral resources for economic growth

Need to promote value addition of Nigeria`s mineral resources for economic growth

Nigeria is blessed with 44 different types of minerals in commercial quantities, found in no fewer than 500 locations across the country. Among these, seven are classified as strategic and critical for the global energy transition. They are coal, iron ore, bitumen, barite, gold, limestone,lead-zinc,

These minerals have the potential to transform the nation and alleviate the increasing poverty rate in the country. Yet, Nigeria is still over dependent on oil, with 133 million people classified as multi-dimensionally poor.

The Nigeria Extractive Industries Transparency Initiative (NEITI) stated in a report that in spite of the consistent year-on -year increase in revenue to the federation account from the solid mineral sectors from 2007 to 2021, its contribution is still low compared to its enormous potential.

Read also: Insecurity, poor regulation threaten Nigeria solid minerals potential

Data from the National Bureau of Statistics (NBS), showed that the mining and quarrying sector contributed 4.47 per cent to the overall Gross Domestic Product (GDP) in the fourth quarter of 2023, in 2022 of same quarter, 4.51 per cent while in 2021 it contributed 5.25 per cent.

Experts say the figures indicate the sector grappling with inadequate infrastructure, illegal artisanal mining, and various community challenges among other issues.

To address this situation, the Ministry of Solid Minerals Development is tasked with developing the sector to contribute more to the nation`s industrialisation.

However, in spite of this responsibility, political will is required to drive the process and maximise its gains for nation-building, a commitment that the administration of President Bola Tinubu has pledged to fulfil.

Upon assuming office as the Minister of Solid Minerals Development in 2023, Dele Alake declared that under his leadership, the sector aims to contribute 50 per cent to Nigeria`s GDP, primarily through foreign direct investment.

Experts say the move to reposition the sector is even more urgent with the global upsurge for energy transition which requires a shift from the use of traditional fossil fuels and reducing dependence on oil hydrocarbon in favour of green energy.

Alake said that the mineral deposits are required to sustain the transition for decades and centuries, which Nigeria possesses.

However, stakeholders say for Nigeria to wriggle away from over-dependence on oil, increase its contribution to GDP, and keep pace with the evolution in the energy sector, concerted efforts and strategic partnership are required.

This includes ensuring that its minerals resources receive their deserved value in the international markets.

The government has been engaging in both local and international efforts to attract foreign investors and encourage them to establish long-term businesses in the country.

However, experts observe that such deals should not deprive Nigeria of its rightful earnings from its mineral resources. Instead, they should be mutually beneficial for all parties involved.

Read also: Iwuanyanwu urges Ndigbo to harness untapped resources in region for economic growth

To ensure this the federal government has placed a ban on the export of raw solid minerals, and plans are under way to formulate policies that promote value addition to minerals before exportation.

The minister said that the government would give license only to mining companies that would comply with value addition to Nigeria`s mineral resources.

In the quest to achieve this vision, the minister took a leading role in advocating for the cause during the Future Minerals Forum in Riyadh, Saudi Arabia, held in January.

At the conference, Nigeria and Uganda spearheaded the formation of a coalition among African countries to advocate for local value addition and maximum beneficiation from their vast mineral resources, for the benefit of their citizens and member countries.

Also, at the 30th edition of the ‘Investing in Mining Indaba` conference held in February in Cape Town, South Africa, African countries consolidated their efforts and resolved to forge a common vision aimed at ensuring the continent maximises the benefits of its mineral resources.

For the critical role of Nigeria as the giant of Africa in achieving the feat, Alake was unanimously elected as the chairman, Africa Minerals Strategy Group at the conference to help the region in advancing its mining sector.

He called for concerted efforts among African countries in striving to end the era of carting away solid minerals in the region and urged for unity in advocating and demanding value addition as a prerequisite for investment in their mining sector.

“Today, there is economic scramble for Africa, the critical metals needed for the transition are in Africa.

“Therefore, if we do not come together this time around and take our destinies in our hands, we will go through the same harrowing experiences of the past. That is why we form this body.

Read also: Forging a new frontier: The inaugural Solid Minerals Conference by BusinessDay Newspapers

Let those who want our minerals know that if you go to country A, you have the same regulations and laws guiding the sector. You go to country B, you find the same.

“So, there is no divide and rule anymore. That is when we can show sincerity of purpose, and the world will begin to take Africa seriously, “ he said.

As Nigeria strives to get value for its minerals, it is currently experiencing Lithium boom, a critical mineral needed for energy transition.

Five states are currently mining the mineral and even more have reported on discovering deposits, but experts say urgent formalisation is crucial in ensuring security at the mining sites during its exploration and extraction.

Stakeholders have noted links between the tussle for control of mining sites and banditry in the country.

Experts say that formalising the sector would involve incorporating illegal miners into cooperatives which would facilitate digitisation and the issuance of digital identity cards. These cards could be used by the government for identification purposes and to identify foreigners who exploit Nigeria`s porous borders for illegal mining activities.

To that effect, Tinubu established the Inter-ministerial Committee on Securing Nigeria`s Natural Resources in January as part of efforts to find lasting solutions to banditry.

The committee, led by the minister of solid minerals, aims to create a new security architecture.

Experts, however, advised that all critical stakeholders should be involved in the process to ensure its success and sustainability.

The Federal Government has also expressed commitment to establish the Nigerian Minnig Centre of Excellence (CoE) as part of its efforts to reposition the sector and equip it to contribute optimally to improving Nigeria`s economic profile.

The CoE would be established as a one stop shop aimed at easing the process of doing business for investors in the solid minerals sector while also meeting their needs.

Mary Ogbe, the Permanent Secretary overseeing the Ministries of Solid Minerals Development and Steel Development, stated that the centre would serve as a platform to facilitate collaborations among key departments in the solid minerals sector.

Read also: Nigeria’s solid minerals to become next crude oil — Aigbogun

He said it would also serve as a focal point for international partnerships and collaborations in mining investments.

While efforts are ongoing in repositioning the sector, stakeholders say there is the need to also establish a structure that guarantees the sustainability of policies and promotes the local economies of mining host communities.

 

Martha Agas write from News Agency of Nigeria