The abysmal contribution of 0.63 percent by the nation’s solid minerals sector to the Gross Domestic Product (GDP) is one that continues to befuddle the imagination of industry watchers who believe the sector is capable of contributing as high as 10-35 percent as done in other mining nations. Ruth Tene Natsa writes on the phenomenon and how the beneficiaries of illegal mining continue to steal the nation blind.
“More than 80 percent of the sector, in particular, artisanal mining, is unregulated.”
The low contribution of the sector to the nation’s GDP is one that confounds the huge potential the sector is known to have. This is because mining is known to occur in all 744 local governments of the federation. It also undermines the huge economic minerals Nigeria is known to have.
It is a reality that while the federal government records minimal or no records of royalties or taxes accruing from the huge minerals the nation is known to have, Nigeria continues to suffer huge environmental, health, and economic losses as a result of such mining activities.
According to Orji Ogbonnaiya Orji, the executive secretary/CEO of the Nigeria Extractive Industries Transparency Initiative (NEITI), “the NEITI report showed some improvement in the solid minerals sector’s contribution to GDP—from 0.26 percent in 2019 to 0.63 percent in 2021.
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He, however, stated that the figure is still very abysmal considering the potential of the solid minerals sector to act as a catalyst for economic growth and development of our country.
Also speaking, Abiodun Baiyewu, Global Rights executive director, opines that “with more than 40 minerals in commercial quantities strewn across our country, paradoxically, as we all know, our extractive sector contributes less than 1 percent of our national GDP. More than 80 percent of the sector, in particular, artisanal mining, is unregulated.
She noted that “Across Nigeria, communities are bearing inordinate consequences for unregulated mining in Niger State, and especially with the recent disasters in Niger State. Now, we are at the end of oil, and Nigeria needs to get to the programme and realise that we are at the end of oil, and our economy is dwindling at the same time. This is crisis mode in Nigeria.”
This unfortunate and miserly contribution has been blamed on a number of factors, but mostly on the activities of illegal miners, who are allegedly sponsored by prominent Nigerians and even persons in government.
Just recently, the Chief of Defence Staff, General Christopher Musa, alleged that most illegal miners in Nigeria have connections in high places and brag about it.
The reality that solid minerals are on the federal government’s exclusive list has revealed how state governments have been known to pay little or no heed to mining activities in their states. This is despite the huge impact of mining, particularly in host communities across the states. The argument continues to gain that while state governments are concerned with land ownership, the conflicts of having the federal government issuing licences to miners continue to undermine the interests of the state governors to protect the nation’s mineral resources.
This does not negate the fact that states benefit 13 percent derivative from the FG or that states benefit from other forms of taxation from mining companies operating in their states.
BusinessDay recalls that the unregulated activities of illegal mining in Zamfara State in 2010 had led to the deaths of over 400 children, as recorded by Doctors without Borders. Their activities led to environmental pollution and degradation that subsequently led to serious security breaches, displacing thousands of citizens.
Similarly, Niger State is currently undergoing the effect as some gold mines were reported to have collapsed, burying over 50 people yet to be rescued. Ebonyi, Gombe, Osun, and other states continue to suffer huge losses as a result of illegal mining activities, which cause various losses to host communities and states.
The story of environmental disruption continues to spread across the states as mining communities continue to decry displacement, pollution, health challenges, and economic losses, as well as social and economic losses.
Meanwhile, Amosu C.O. and Adeosun T.A., the International Journal of Advances in Engineering and Management (IJAEM) journal, in a published article titled ‘Curtailing Illegal Mining Operation in Nigeria’ had written that “Nigeria is endowed with significant solid mineral resources that have the potential to attract investors and investments to boost economic growth in the country. The mineral resources range from tin, copper, bauxite, diamonds, and gold, to mention a few.
The duo alleged that ‘Unfortunately, this endowment is being undermined by constant illegal mining by some persons, including foreigners, believed to be sponsored by moneybags. The Nigerian government may have lost about N4 billion in three years, owing to illegal practices and corrupt activities of companies operating in the mining sector in Nigeria.
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The publication alleged that illegal mining began to gain prominence after independence in 1960. Mining rights belong to the federal government, but it grants licences for exploration, mining, and sale of minerals.
The paper informed us that “in the absence of effective policy, illegal mining has continued unabated and no royalties are paid to the federal government.
It was therefore not surprising that the federal government, through the ministry of mines and steel development, had earlier in the year given illegal, informal, and unregulated miners a 30-day grace to join artisanal cooperatives.
A statement by the ministry informed that, as of the last count, 152 cooperatives have been formed across the country in line with the minister’s non-kinetic approach to curbing illegal artisanal mining. Through this initiative, hitherto illegal miners have had their operations legalised while the government is able to harness more royalties and taxes from the operations. The operators can also access credit to expand their business.
Interestingly, efforts to really gain insight into those sponsoring illegal mining have uncovered a whole gamut of information that will require the government to set up policies that must be applied to ensure enforcement.
It is no longer news that the mining cadaster office operates a ‘Use it or Lose it” policy in which licence operators are required to use the licence they get or lose it. It was therefore no wonder that the federal government, through Dele Alake, the Minister of Solid Minerals Development, in April announced the revocation of 924 dormant licences.
The revocations, according to the minister, include 528 exploration licences, 20 mining leases, 101 quarry licences, and 273 small-scale mining licences.
Alake, who spoke while briefing the media in Abuja, announced the revocation for failure to pay statutory charges, fees, and dues to the federal government through the Mining Cadastral Office and had warned licensees who were yet to resume work on their mining projects to do so immediately.
“On that occasion, I explained that one of the obstacles to the development of the sector was licence racketeering. This is carried out by persons who obtain licences over cadastral units that they know have minerals of commercial value. Rather than mobilise men, money, and materials to the site, they pollute the market by engaging in speculation and offering the licences to the highest bidder.
Meanwhile, responding to those sponsoring illegal mining, Baiyewu has alleged that “licence holders have an arrangement with artisanal or informal miners, such that per every five bags, they get three, the miners get two; it is the most common form of unregulated mining, ” she added.
The Activists further informed that “in certain communities, especially the Chinese, a lot of them have never been to the ministry of Mines and Steel Development or the Mining Cadastre Office in that matter, which also points to the fact that they are getting hold of those who own licences. They more like to sublease them; some do not even do that; they simply walk into communities and meet with the village heads/community leaders and rent lands, and for some of these communities, the offer of rent is attractive to them, and so they accept and allow them access.”.
“For instance, in Osun State, a lot of them, the licences, are owned by Nigerians and being used by Chinese, so there is that problem.”
She also lamented the poor and ill equipment of the regulators, particularly the ministry of solid minerals development. In her words, “On the other hand, the unregulated miners, because in most cases the state offices are ill-equipped to tackle state needs, and it boils down to the poor or lack of empowering the state offices to tackle state needs. For instance, Niger and Zamfara states are huge on mining, but state offices are ill equipped.
“During Fayemi’s time, he purchased vehicles for all the states, but what is one vehicle and four mine officers to a state like Niger, which is 1/10th of Nigeria or Zamfara? So the ministry itself is under-resourced to deal with whatever mining is going on, and when they do, they get prospective licences and go into full-scale mining. This is a regulation problem and not illegal. They are not illegal, just that they are going beyond the confines of their permits they have.”
It is also about beneficial ownership. One of the things we want to do at Global Rights is to begin to scout to get all known mining sites across states and put them on the map and compare with what the ministry has, because at this point in time, nobody even knows where. Smaller states like Ebonyi are lucky because they have a 3-bedroom apartment with 3 mine officers and, of course, the federal government-assigned van, which allows them to move around, but most states do not have the resources to tally with the resources they have.
Ms. Baiyewu maintained that to curb the spread of illegal mining, there needs to be collaboration across all tiers of government to tackle the vast mining issues across Nigeria.
“Each state should have between 10-20 mines officers with sufficient vehicular support to support their mobility. Host communities must embrace beneficial ownership to protect their resources, and companies must be held to account to ensure mining is done the right way.” She stressed.
