By Oscarline Onwuemenyi
THE Federal Government has sought an additional $80 million credit from the World Bank to enable the implementation of additional work necessary to trigger the full development of the mining sector in the country.
This is in addition to the $120 million concessionary credit it received in 2004 from the global lender as part of a Development Credit Agreement towards funding the Sustainable Management of Mineral Resources Project (SMMRP) implemented by the Ministry of Mines and Steel Development.
The Minister of Mines and Steel, Arc. Musa Mohammed Sada, who made this known on Monday in a keynote address at a Stakeholders’ Workshop on World Bank funding of the Nigerian Mining Project, in Abuja, explained that the initial concessionary credit was required to jumpstart the development process for the country’s solid minerals industry.
He said, “The government over the years has recognized the imperative to diversify our economy away from oil and gas; the mining sector was, therefore, identified as critical to the achievement of this goal.
“The Project is in direct response to government’s emphasis on the development of non-oil sources of revenue, with mining and agriculture remarked as sectors with the greatest potentials. Government had sought to diversify the economic base of the nation, give it some balance and ensure less susceptibility to the vagaries and dynamics of international oil price mechanism.”
He said there was also the need to increase output of industrial minerals such as gypsum and barite, which would serve as input factors for local production, thereby reducing achieving import substitution and conserving foreign exchange.
According to him, given the enormous and wide range of mineral endowment found in nearly every community across the country, government had realized the potential of the mining sector in helping fast-track wealth creation, employment generation and poverty reduction, especially in the rural areas.
Sada explained that the objective of the Sustainable Management of Mineral Resources Project is to increase the government’s long-term institutional and technical capacity to manage Nigeria’s mineral resources in a sustainable way.
“It is also to establish a basis for poverty reduction and rural economic renewal in selected areas of the country via the development of non-farm income generating opportunities through small-scale and artisanal mining and to diversify away from oil sources of income,” he explained.
He noted that prior to the commencement of the SMMRP in 2005, “the mining sector was in a deplorable state of collapse owing to nearly four decades of neglect occasioned by the discovery of oil in commercial quantities and the Indigenization Act of the 1970s which was a disincentive to foreign mining companies and investors.”
Sada added that the decline in tin prices in the 1980s, as well as the harsh economic conditions that became prevalent during the periods of Austerity Measures and Structural Adjustment Programme (SAP) brought mining activity in the country to its lowest ebb.
“This resulted in over 95 percent of mining in Nigeria being undertaken at artisanal and small scale levels. Artisanal and small-scale mining (ASM) is largely driven by poverty, hunger and struggle for survival in a very difficult and challenging sector,” he said.
Meanwhile, the Minister has reported that the Project has reported satisfactory performance ratings in its financial management and procurement functions, and was on course towards meeting the development objectives.
“The SMMRP has surpassed some of targets set in the original performance indicators, which were revised upwards during the Mid-term Review and Quality Assurance Group (QAG) Review conducted by the World Bank in April and May, 2008,” he stated.
He regretted that the Nigerian banking industry “lacks awareness of the importance of the mining sector to the national, hence the little or negligible investment by the banks. This does not augur well for both sectors.
“There is no better time for banks in the country to look in the direction of the mining sector given the enormous growth and development recored, which is exemplified by the increase in the number of investors both locally and internationally coming in to play a part in the Nigerian mining industry.”