Mining the Potentials of the Mining Sector.

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THE PROBLEM STATEMENT

The Nigerian Minerals and Mining Sector is one of Nigeria’s promising, but underdeveloped economic sectors in this decade. The sector is responsible for managing and exploring Nigeria’s economic potential through development, Investment, and trade from its abundance of mineral resources, including high-value metallic minerals, industrial minerals, and energy minerals. Nigeria is enriched with over forty (40) types of minerals including marble, gypsum, lithium, silver, granite, gold, gemstones, bentonite, iron ore, and talc. It holds the economic capacity to create jobs, foster prosperity, and generate additional revenue. However, between 1970 and 2015, the contribution of this sector to the economy’s GDP dropped by more than 80%. Nigeria’s Minerals and Mining sector are still underdeveloped owing to the nature of multi-stakeholder relationships amidst differences in governing systems and regimes, necessary to enact the policy to maximize the abundance of resources in the sector. These challenges were observed in the last decade and gave rise to policy reforms including a new Nigerian Minerals and Mining Act (2007), a Nigerian Mineral and Metals Policy (2008), the creation of a modern Mining Cadaster system, the refinement of the tax code, and the expansion in the airborne mapping of the country to deepen knowledge of the mineral endowments. The biggest challenge to the influence of policy in the sector is uncertainty. This uncertainty is characterized by the political risks directly connected to the slow reform implementation, policy failures, and policy deformation. These stem from the overlapping jurisdictions of the several authorities involved at several levels of government in the licensing process for mining in Nigeria.

THE POLICY SOLUTION

Nigerian Mineral and Metals Policy developed a decade ago (in 2008) was designed to attend to the sectorial challenges accounting for the decreasing rate of contribution to Nigeria’s Economy. The Nigerian Minerals and Metals Policy is an 89-page document developed by the committee led by The Minister, Dr. Kayode Fayemi, and the Minister of State Bawa Bwari. It is titled “Road Map for the Growth and Development of Nigerian Mining Industry Committee (“the Committee”) of the Federal Ministry of Solid Minerals Development”, developed to transform the minerals mining and metals sector in Nigeria. It highlighted the sectoral challenges directly contributing to the dysfunction of the sector and highlights the lack of clarity in governing laws and conflicts between different levels of government in terms of rights to issue mining licenses and allocation of revenue from the sector, as the major challenge stifling the growth and development of the sector, owing to its intersection of property, taxation and natural resource extraction laws at the federal, state and local levels. The policy document relays a framework for the revitalization of the sector through a three (3) broad phased strategy within “preliminary timescales” of 6 months to 10 years. The first phase aims to stabilize the sector and rebuild market confidence, The Second phase, outlines steps to establish a competitive African mining and minerals processing center in Nigeria, and the third phase, focuses on the global market and competitiveness for refined metals and minerals of the country’s mining sector, in addition, to select ore exports.

 

NIGAC CONSTRUCTIVE POSITION/TAKE

The sector’s major challenge happens to relate to stakeholder engagement and management. The role of the ministry is best optimized by focusing on infrastructural development, Licensing, and establishing foreign relationships instead of the development and implementation of Policy. The development, implementation, and measurement of policies deployed in that sector should be handled by sector-wide professionals who are committed to this task and can be audited and evaluated by the institutions established by the deliberations between the Public and Private sectors. This crucial task should no longer be handled by the Government related or associated organizations to reduce the recurrence of stakeholder disagreements and corruption. This would also facilitate transparency in the sector and sectoral development.

Secondly, there needs to be the introduction of technology within that sector. The introduction of technology into the systems and process defining the value chain of the sector would be instrumental to the enactment of the policies formulated to drive the growth and development of the sector. The existing processes and systems, give much room for corruption and exploitation, but the introduction of technology would decentralize the process and organize the different processes and systems into one wholistic and transparent organization.

Finally, the development and implementation of policies need a dramatic shift from minerals resources to the mining of resources. The existing policies are more focused on the management and allocation of resources than the mining of these said resources. This creates and slow growth observed in the sector. The sectorial reform would be best harnessed through precedence on mining-focused policies than mineral resource focused policies implemented to strengthen the sectoral institutions through systems created by experts outside the structures of government.

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