• Friday, March 29, 2024
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Inconsistency in government policies stalled Nigeria’s mining industry growth – Okunlola

Mining Sector

The underdevelopment of the Nigeria mining sector has been attributed to the inconsistencies in government policies in the past because policy makers did not consult professionals before taking decisions, a university don has said.

“The problem with mineral industry in Nigeria is not policy. It is the inconsistency in the policy that is the problem,” said Gbenga Okunlola, a professor of geology at the University of Ibadan, and a fellow of Nigerian Mining and Geosciences Society (NMGS).

To move the mining sector forward, all the policy makers should always consult professionals because mining is a knowledge-based industry. “Without professionalism, quackery and inconsistency of policies from government and other stakeholders in the sector cannot move the sector forward,” Okunlola said.

According to the University of Ibadan don, some of the actions and reforms Nigeria undertook led the nation to where mining industry finds itself today.

For example, the indigenisation policy of government in 1972 where foreign investors in the country woke up to a new decree that they must forfeit their investment by 30% to government, caused the decline of mining industry till today.

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Foreign investors brought in their investment, competence, technicalities, equipment since 1920s, but had to leave because of the indigenization policy.

“The indigenisation policy of 1972 by the Federal Government was a mistake,” he said.

Okunlola argued that because the investors could not cope with the new policy, they left the country. Since then, the mining industry in Nigeria has been struggling to survive, he stressed.

“There must be consistency in policy implementation,” he said.

According to him, there should also be inclusion of good leaders who have the capability of thinking and planning ahead of time. This, according to him, goes beyond short-time political consideration, and requires involving professionals in policy making. “Mining industry is not a short time investment. It is a marathon,” he said.

Explaining further, he pointed out that the nature of the industry may require investors to stay-put in the business for a minimum of 25 years. So, if government is not consistent with its policies, changing them at will after people have invested huge sums, no investor would want to risk such thing, Okunlola said.

“If I know government will change its policies after 5 years of investing my money in your country, which will make me to lose my money, as an investor, I will not come,” he said. This explains why investors are not keen to invest in mining industry in Nigeria.

Another problem is that 80 percent of the total budget for mining exploration comes from outside Nigeria. Because of this, donors and creditors are always watchful to see what is happening with the fiscal policy. Any inconsistency in the fiscal policy results in donor countries to stay back for a minimum of 10 years.

“For this reason, we must get our policies and fiscal policies right,” he said.

Joseph Ayalogu, a retired diplomat and group executive director, Eta-Zuma Group, which mines coal in Enugu, said government needs to do more in curbing the activities of illegal miners which adversely affects mining business.

According to him, licensed miners who invest in the industry and comply with all the required processes are burdened seeing illegal miners having a field day in the industry, “and government has not done much about it,” he lamented. “This is a big concern to a real investor.”

According to him, acquiring mining and exploration licenses and fulfilling all the requirements for legal mining cost a lot of money; yet illegal miners who do not contribute to the government revenue cause problems for the legitimate miners.

“We want to see more government actions in that area,” Ayalogu pleaded. He pointed out that if nothing was done, illegal miners “will scare real investors away because nobody wants to spend money and have rogue miners coming to destabilise the area.”

Illegal miners have become powerful such that they go into people’s licensed concessions to mine illegally and constitute threats the real owners of the sites.

“Illegal mining undermines the integrity and potentials of the sector, both on the loss of revenue to the government, management of the area and responsibility to the community,” Ayalogu added.

Dele Ayanleke, Secretary, Miners Association of Nigeria, described illegal miners as touts, saying that they constitute menace to everyone and to the industry.

Collaborating Ayalogu, Ayanleke said illegal miners excavate and destroy the land. In some cases, they could constitute a danger to the lives of others, if the are many.

JOSEPH MAURICE OGU