By Michael Eboh
THE Federal Government has launched a report designed to enhance the contribution of the solid minerals sector to Nigeria’s revenue and Gross Domestic Product, GDP.
Speaking at the launch of the report, Improving Transparency and Governance in Nigeria’s Mining Sector, Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, NEITI, Mr. Waziri Adio, said the sector, despite not being tapped to its fullest, had the potential to grow Nigeria’s economy, create jobs and address a number of social issues.
According to him, NEITI, in launching this report, is seeing how it can bring on board, what needs to be done and how it should be done, adding that it wanted to go beyond audits and do things that would impact lives of the citizenry.
He said: “There is no doubt that Nigeria has lot of potentials in the solid minerals sector, but having potentials is not enough. Potentials by itself would not translate to improved revenue for improved fortunes for the country and for its people.
“Our country definitely needs other streams of income, but we are not doing that. This sector is one that has all the potentials to generate more revenue for our country, create more jobs for our people, to even expand our industry base. Rather than continue to talk about the problems all the time, we want to do something that would build on ongoing reforms in the sector.
“The Ministry Of Mines and Steel Development, MMSD, is doing enormous work to reposition the sector. To align with that, we want to see how we can bring certain perspectives, not just on the potential and problems, which we all know, but what needs to be done and how.”
The report presented by its Editorial Consultant and Professor of Geology, University of Ibadan, Mr. Gbenga Okunlola, disclosed that in comparison with other countries with similar potential, Nigeria’s mining sector was still largely underdeveloped.
The NEITI report stated that until recently, when there had been a slight improvement, the mining sector’s contribution to the GDP had not been more than 0.5 per cent, a reversal from the historically higher percentages of about 4-5 per cent in the 1960s and 1970s.
The report noted that the misfortune of the solid minerals sector started with the Indigenisation Decree of 1972, which saw massive withdrawal of foreign investments in the mining industry from the country, leaving the bulk of private sector mining operations in the hands of small-scale local miners.
According to the report, these factors were largely responsible for production decline in the sector, particularly in the metallic minerals sub-sector, starting in the late 1970s.
The NEITI report noted that today, the mining industry has the potential to sharply contribute to the country’s GDP, but was currently under-performing, responsible for 0.33 per cent of employment in Nigeria, 0.02 per cent of the country’s exports and 0.3 per cent of the country’s GDP.
The report, however, called for policy consistency in the sector, stating that this would help boost Nigeria’s score in the global Policy Perception Index, thereby, removing the barriers to investments in the sector.
It argued that mining policies should also guarantee predictability and consistency of applications of rules, noting that any sudden change of rules might cause a 10-year lull in foreign investments inflow into the industry, as investors take that number of years to observe an economy and assess its rules before investing.
To this end, to improve transparency and governance issues in the mining industry, the NEITI report advocated the sustenance of a robust regulatory framework, revamp of the institution and technical structure; ensuring a more conducive finance and business environment; plugging of loopholes between production and revenue; communities and stakeholders participation among others.