Olamilekan Adegbite, Nigeria’s Minister of Mines and Steel Development has revealed that revenue from Nigeria’s mining sector is expected to hit N8 billion by December 2021 as the ministry intensifies efforts to develop the industry and block revenue leakage.
“In 2019, the sector was generating N2.5 billion in revenue to the economy but this has grown to N6.8 billion as of September 2021, which has increased its contribution to the GDP and we are looking to grow it to N8 billion by the year-end,” he said.
Adegbite who spoke at an evening with the Minister hosted by the Lagos Business School on Thursday explained that efforts have been intensified to drive full recovery of the sector which include blocking revenue leakages, provision of data and driving increased investments.
The minister noted that Nigeria’s mining sector is commencing operations with better prospects and increased opportunities that are attracting investors. Leveraging the 2007 mining act, he added that both the sector stakeholders, states and investors are protected.
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He acknowledged that there are challenges in the sector that affected its activities but the government is looking to address them and also encourage the inflow of investments.
“Some challenges of the sector highlighted by the 2016 roadmap include lack of data and geoscience information, weak mining institution, lack of new technology, skills and training and limited engagement with key stakeholders poor revenue generation and leakages, challenges of industry participants, and many others,” he said.
the minister mentioned that the country was losing a lot of value with its export of raw resources which contributes to revenue leakage and profit shortage in terms of byproducts hence efforts are ongoing to address the issue.
“We realized that a lot of raw ore is being exported from Nigeria abroad and we are losing money, so we started the downstream policy and when it is finalized and approved, it is going to discourage totally the export of raw minerals, because it is will enforce the payment of premium to export it raw,” he said.
He added that if value addition cannot be carried out, explorers are advised to sell to processing companies locally.
Speaking on other ways the sector is being revived, He revealed that the mining industry is being digitized, in addition about five abandoned mining sites have been reclaimed so far using provisions from budgetary allocations with more on the way.
He said that the government provided funding of N30 billion in 2017 to enhance the sector activity of which 50 percent was dedicated to research and exploration through the National Integrated Mineral Exploration Project (NIMEP) program, hence data will become readily available when it is concluded.
“We now have data that is bankable on gold, barite, coal and we have taken this data to various countries and investors were interested so we will sell this data back to investors with plans to hold an auction in the first quarter of 2022, Revenue realized from the sale of data will be ploughed back into further exploration work,” he said.
He also said that discussions are ongoing with the Nigerian stock exchange to create a funding structure that will pump public funds into mining activities, adding that banks lack adequate knowledge about the sector which limits credit inflow.
Other than increasing contribution to revenue, the minister noted that the sector will also bridge Nigeria’s unemployment gap by providing employment and job creation opportunities.
“Nigeria imports Barite worth $300 million from Morocco annually despite its abundance in the country, however, the made in Nigeria Barite was launched in October and is being established, this helped to create employment opportunities and much more of it will come,” he said.
