The Lagos Chamber of Commerce and Industry (LCCI) has come up with series of solutions to the age-long challenges facing the mining industry in Nigeria.
These include replication of what the Central Bank of Nigeria has done to agriculture through its agent, the Nigeria Incentive-Based Risk Assets Sharing System for Agricultural Lending (NIRSAL), and elimination of multiple taxation and inspection in the industry.
Babatunde Alatise, chairman, mining and solid minerals group of the Chamber, gave the proposed solutions, while addressing stakeholders in Lagos, recently.
Alatise noted that investors shy away from investing in mining industry because it is considered to be too risky, noting that the same notion was previously held of agriculture and agribusiness, but today through the activities of the Central Bank of Nigeria (CBN) set NIRSAL, that perception is gradually being re-written as agricultural practices have been substantially de-risked.
“Since such mechanisms and structures have been put in place in a manner that attracts technology and finance into agricultural sector, it can also work in mining sector,” Alatise said.
On this ground, Alatise called on the Ministry of Mines & Steel Development (MMSD) to work closely with the CBN to possibly expand the mandate of NIRSAL to include mining, minerals, and metals trading or have the CBN set up similar structures for the solid mineral industry.
He noted that the expansion in the export of agricultural products has been achieved more by working on the production side of the industry through simplifying the export process in order to make the sector attractive to investors.
“It is important to draw inference from agriculture because solid minerals and agriculture have been attracting multi-billion naira investments from within and abroad,” he said.
Also, one of the factors that discourage investors from investing in the sector was identified as the losses previously incurred by traders and bankers in the sector.
According to Alatise, to restore investors’ confidence, MMSD should consider revisiting some of the transactions especially those with the banks with a view to granting some form of forbearance to the loans, as was done in the capital market.
Also, to make solid mineral sector vibrant, he argued that industrial sector players should be consulted by the government whenever any policy in the industry is to be made, otherwise, the sector will experience further setbacks.
“The solid minerals sector stands to suffer huge losses of interest if any strange policy is instituted without the input and review of the active private sector,” Alatise noted.
LCCI also proposed that relevant stakeholders including MMSD, Nigerian Custom Service, CBN, Nigerian Export Promotion Council, the Securities and Exchange Commission, the Ministry of Finance, and the organised private sector to revamp the Nigerian Commodities Exchange (NCX) with a focus on solid minerals. In the alternative, they should create the Nigerian Minerals Exchange, where trading on metals & minerals would be done with a focus on ‘ease of doing business.’
On the collection and monitoring of royalties, Alatise calld on government to strengthen the Federal Mines Officers to monitor and collect royalties at the weigh bridges of the respective mines’ sites.
Consequently, the officers should be able to issue royalty payment validation documents that enable potential exporters to travel with their solid minerals to any export processing zones within the country.
According to Alatise, government should focus on attracting the big miners and investors to the country so that activities in the sector would be increased.
But he cautioned that small-scale mining leases should remain the exclusive reserve of Nigerians while foreign investors should pursue mining leases, beneficiation and smelting plants. They could also provide support by a way of equipment leasing and sales.
“This is the area that needs much more attention,” he emphasised.
For this reason, Alatise said, the MMSD should as a matter of urgency set up mechanisms for the implementation of Executive Order 5 (EO 5) as it relates to the industry by ensuring that illegal foreigners operating in the sector were flushed out.
Also, he argued that Nigeria must begin to pursue investments in value addition in the areas of beneficiation and smelting for registered cooperative artisanal miners, as it would greatly improve the quality of mineral exports and raise the sector’s contributions to the nation’s GDP.
To improve security in and around the mines, Alatise said the defunct Mines Police used decades ago could be reintroduced.
In addition, he opined that Nigerian Customs (NCS) and Aviation Security (AVSEC) Officers needed reorientation training in solid minerals and metals identification and stricter compliance monitoring and sanctions as well.
Finally, Alatise said state governments should create public-private partnership (PPP) with credible technical partners to further create internally generated revenue and reduce unemployment, rather than frustrating potential investors with multiple layers of taxation.
JOSEPH MAURICE OGU