Our priority is anchored in gold sector — Adegbite

By Gabriel Ewepu – Abuja

The Federal Government, Thursday, disclosed target of five per cent for solid minerals sector contribution to Gross Domestic product by 2025 from the current 0.6 per cent.

This was made known by the Vice President, Prof Yemi Osinbajo, in special keynote address at the ‘Virtual Conference on solid minerals development with theme, ‘Sustainable Mining in Nigeria: The Critical Role of Local Governments for the Realization of Economic Diversification Agenda Through the Mineral Sector’.

Osinbajo who commended the Ministry of Mines and Steel Development for the initiative expressed optimism that the conference will engender mutual understanding and collaboration especially now that the country is challenged by divisive sentiments.

He said: “As the Vice President, I am not oblivious of the past efforts of the Ministry to engage the State Government leaderships through the National Executive Council and the approvals of Federal Executive Council over issues of interferences in mineral administration by other tiers of government.

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“Today’s event offers us a golden opportunity to sensitise the closest tier to the grassroots where most of the mining activities occur on the prevailing mining legal regime and the mutual benefits of a sustainable mining in Nigeria.

“I am confident that we can achieve our goal of sustainable mining in Nigeria if the local government chairmen here present would take this message to the grassroots especially the various mining communities in their council areas.

“It is very delighting to note that available report today from the Nigerian Geological Survey Agency (NGSA) confirms that Nigeria is endowed with over 44 mineral deposits occurring in commercial quantities in over 500 locations across the 36 States and Federal Capital Territory of Nigeria. Accordingly, it can be reasonably inferred that every Local Government Council (LGC)Area of the country is endowed with one or more mineral resources that can be harnessed for the development of the LGC and the country at large.

“The value chain of these mineral resources remains largely untapped and as such they are not readily available for sustainable economic development of the country more so that the mining industry is dominated by over 90 per cet artisanal operators.

“It was on the aforesaid premise that the President Muhammadu Buhari led administration decided to anchor his administration’s Diversification Agenda on two key sectors of Mining and Agriculture.

“In ensuring the delivery of its statutory and Presidential mandate, MMSD targets to grow the minerals sector contribution to Gross Domestic Product (GDP) from the current standing of about 0.6 per cent to five per cent by year 2025.

“To achieve this goal, the Ministry initiated and is implementing several structural reform programmes for the sustainable development of the Minerals and Metals sectors.”

He further stated that, “As Chairman of the Economic Sustainability Committee (ESC), to coordinate the implementation of theN2.3 trillion Economic Sustainability Plan (ESP) aimed at cushioning the economic effects of the COVID-19 pandemic; The mining sector was approved a N6 billion intervention support for the development of mineral processing clusters across the six geo-political zones of the country. The ESP has created and saved over two million jobs through its implementation which began in June last year.”

However, he highlighted some challenges confront growth and development of the sector which also have negatively affected the Buhari-led administration’s diversification agenda.

“I will take on some key conflict areas challenging the sustainable mining in Nigeria and allow the eminent panelist and participants to attend to other peculiar issues facing their particular jurisdictions. Exclusive List of the 1999 Constitution; We are aware that the 1999 Constitution (as amended) vests the power of control and management of Solid Minerals Resources with the Federal Government. It is in line with the constitutional provisions that the Nigerian Minerals and Mining Act, 2007 was enacted to provide the legal framework for the administration of the sector.

“However, the idea of a faraway Federal Government determining how to administer the natural endowment within the States, LGC and local communities has not been properly appreciated by the other tiers of government and has created unfriendly atmosphere in many mining jurisdictions.

“Such cases have made genuine investors to lose their investment while prospective investors are scared away. Aside these, revenue due to FGN and indirectly the States/LGAs have been lost due illegal operations by unlicensed actors who enjoyed backing of such local authorities.

He also pointed that enactment of parallel mining laws and regulations by other tiers of government, which he expressed dismay that some State Governments have continued to interfere and usurp the powers of the Federal Government and the statutory powers of the Ministry of Mines and Steel Development by enacting parallel Mining Laws, imposing taxes and royalties on miners as well as other levies and sanctions on existing licensed mining companies leading to multiple taxation and hardship.

“This puts legal operators in the sector in a state of dilemma over which of the laws to comply with and has led to huge revenue loss.State Governments noted for this include Anambra, Ebonyi, Edo, Enugu, Kano, Kebbi, Kogi, Lagos, Nasarawa and Ogun and others are copying very fast. Issues as underlisted have become manifest in such mining jurisdictions due to lack of synergy amongst the tiers of government: Illegal introduction and enforcement of outrageous fees, taxes and levies on licensed mining companies and operators (both foreign and Local); Oppression, Suppression, continuous arrest and harassment of licensed Miners and their workers (both foreign and Local); Attack and closure of mining sites using the Nigerian Police Force, Nigerian Security Civil Defence Corps and the Military.

He added that there has been extortion, imposition of Community Development Agreement (CDA) and Memorandum of Understanding (MOU) on miners; Registration and issuance of permit to sand operators and miners by the State Ministry of Environment.

He further advised in the issue of quest for revenue generation by some state governments that have even acted in disregard to the 1999 Constitution, but said there could be collaborative effort and partnership to generate revenue by having understanding with the Federal Government and not to take laws into their hands as far as mineral deposits are concerned.

“Undoubtedly, a number of the State Governments engage in the foregoing activities to improve their revenue. Nevertheless, the actions constitute a major disincentive to prospective investors in the sector and invariably jeopardize the effort of Government at diversifying the economy.

“It is also vital to note that the revenue generated by the Federal Government is distributed to all the tiers of Government in addition to the implementation of the 13 per cent derivation policy for the solid mineral producing States which has commenced.  The point to note is that whatever the Federal Government collects is invariably shared amongst the three tiers of Government.

“Therefore, there is need for synergy between the Federal and State Governments to ensure increase in revenue generation, greater contribution of the mineral and mining sector to the GDP and improvement in the country’s ranking on ease of doing business in the sector.”

Earlier, the Minister of Mines and Steel Development, Architect Olamilekan Adegbite, in an address of welcome, stated that the Ministry’s priority is anchored in gold sector

Adegbite further stated that reforms have begun to bear fruits following achievements in de-risking the sector, thus making it investor-friendly, which he highlighted that the Ministry has operationalised an Artisanal and Small Scale Mining (ASM) Remote Sensing Monitoring System to regulate and support ASM activities.

Almost completing the automation of the Mining Cadastre System to meet international full standards for online mining title and license applications and approvals and decentralize the Mining Cadastre Office (MCO) administrative system, also currently establishing a Nigeria Geo Data Centre at the Nigerian Geological Survey Agency (NGSA) to ease online access to correct geological reports and data for investment decisions and research; Establishment of the Investment Promotion and Mineral Trade Department for investment partners.

According to him there are incentives put in place for players in the sector and potential investors: Customs and import duties waiver for plant, machinery and equipment imported for mining operations; Tax holidays of between three to five years as applicable; Free transferability of funds and permission to retain and use earned foreign exchange; Capital allowances of up to 95% of qualifying capital expenditure; Deductibility of Environmental Costs (money meant for environmental remediation will be tax free);        100 per cent ownership of mineral properties.

He said: “I believe this conference offers a vista for greater collaboration between the Ministry and the Local Government Area Councils.

“We have designed to support the sector. One of which is the optimisation of our mineral value chain. The ultimate objective is to minimise the export of raw materials, creating value along the chain that would increase industrial and manufacturing activities, create employment and foster skills development.

“Presently, our priority is anchored in the gold sector. We are creating a gold ecosystem to minimize the high rate of illegal gold mining and smuggling, increase government’s revenue from the resource, create jobs, and improve environmental and social stewardship.

“Through the ongoing Presidential Artisanal Gold Mining Initiative (PAGMI) we are organising, formalising, and equipping Artisanal and Small Gold Miners (ASGMs) in Kaduna, Kebbi, Osun, Niger, Ebonyi, Sokoto, Gombe, and Ekiti.

“Miners of gold and other metals will be linked to formal markets through licensed precious metals buying centres.  One of such initiatives is the recently launched Dukia-Heritage Bank Buying Centre.

“Two gold refineries, Kian Smith and Dukia Gold and Precious Metals Refining Company Limited, are currently being built to increase the value of gold in the country for the benefit of all stakeholders.

“We are fast-tracking mineral processing in the country using a cluster approach.  Each cluster will be equipped with modern equipment and technologies to support a network of miners, processors, skills development providers, logistics providers, and others.”

According to him other ongoing initiatives to stimulate the growth of the industry include working with several stakeholders to design mining specific credit enhancement instruments.  Miners will be able to access long-term finance at concessionary rates through these instruments; Generating integrated geoscience information that will help in de-risking the mining sector; c.   Developing a mineral economic corridor strategy to address inadequate infrastructure for the mining value chain to function.

Vanguard News Nigeria