Minister of Mines and Steel
Development, Kayode Fayemi’s disclosure that the Federal Government is making
moves to stop exportation of unprocessed minerals out of the country will be
more meaningful if the plan is all- encompassing. Against all economic and
common sense, all of Nigeria’s crude oil is being exported in unprocessed form!
And that is where all attempts to add value and make more money for Nigeria
should start from.
The minister made the
disclosure in Lagos during a Town Hall meeting with stakeholders in the mining
sector. The meeting was attended by representatives of local and international
mining outfits, officials of federal, state and local governments, financial
institutions, manufacturing companies, professional bodies, community
organisations, security agencies and civil society. The minister noted that
government was aware of the activities of some foreign nationals who export
unprocessed minerals through illegal routes, thereby denying the country
accruable revenue.
He stressed that unauthorised export of minerals is injurious to the economic plan of the government and reiterated his ministry’s effort to woo operators to set up plants in Nigeria where they could process the minerals before exportation of the finished products.
In a related development
during a meeting with members of the Association of Miners and Producers of
Barite (AMAPOB) in Benue State, the minister said the Federal Government was
considering injection of funds and creation of good market environment to boost
mining activities in the country. He announced government’s plan to give tax
holidays to miners in an attempt to explore the full potentials of seven
minerals out of the 40 known minerals in the country. These minerals include
limestone, barite, iron, bitumen, lead and zinc.
The minister regretted that
whereas the commercial value of Nigeria’s solid minerals runs into hundreds of
trillions of dollars, currently, Nigeria earns a paltry $89 million per annum. While
the ideas being pushed by the minister are worthwhile, nothing can be achieved
except those ideas are put to concrete use. There have been lots of talks in
the solid mineral sector without action, which explains why revenue from the
sector is minuscule. Whatever needs to be done should be followed up with
action. As a richly endowed mineral producing nation, government has a role to
play in formulating a comprehensive framework to make the country reap huge benefits
from her natural resources.
Unfortunately, rather than
be a blessing, the minerals have become a curse. Part of the problem is failure
of the country to have an enduring strategy for exploitation. Something like
granting tax holidays ought to be a policy already. But the minister’s
submission gives the impression that such an idea is still in the making. Under
its mineral strategy, for instance, the United States offers a number of
important minerals like gold, coal, clay, copper, and so on. But instead of
exporting the mineral, the U.S. imports most of the minerals she needs because
of the low supply and high demand.
The over 78 major minerals
that the U.S. produces absorb nearly 270, 000 people in direct employment. The
industries that support mining account for about three million additional jobs.
The situation is different in China, which has huge deposits of coal, iron,
copper, aluminum, and others. China exports her minerals to Europe, the United
States and some other countries and rarely imports.
South Africa’s economy is
largely built on gold and diamond mining. The mining sector is an important
foreign exchange earner. In 2009, the country’s diamond industry was the fourth
largest in the world. South Africa also produces coal, manganese and chrome.
The country also produces energy mineral, non-ferrous metals and minerals,
ferrous minerals and industrial minerals.
The Nigerian government
should come up with a medium to long-term strategic plan on the mining and
export of minerals in the country. But the objective cannot be achieved without
a time-line within which the operators are expected to set up structures for
processing the minerals. Having said that, the onus is on the ministry to come
up with the needed strategy and the minerals in question should be spelt out.
Nigerian minerals include coal, lignite and coke, gold, columbite, bitumen,
iron ore and uranium, among others.
It may be easy to announce the ban on the export of unprocessed minerals but not easy to enforce. One way to effect change is to hand over the minerals to their owners. Let the states and local governments own the minerals in their domain. The constitutional provision that vests ownership of all minerals in the Federal Government is antithetical to federalism and even productivity. The federating units should own what belong to them and pay appropriate taxes to the Federal Government.
Amid the biting recession,
government ought to develop an economic recovery plan that includes the
exploitation of the minerals. That solid minerals account for only 0.3 per cent
of the country’s GDP is a shame. Prior to the discovery of oil in 1956, Nigeria
was a major producer of tin, columbite and coal. The time has come to open the
industry further to private investors. (Guardian)
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