Dr. Kayode Fayemi, Minister of Solid Mineral Development |
According to
the Executive Secretary of the United Nations Economic Commission for Africa
(UNECA), Carlos Lopes, declining
demand in major emerging economies coupled with continuous fragility in
developed economies, as well as volatility in the currency and shrinking
confidence all call for a reality check.
From Nigeria
to Angola, South Africa and Zambia, the decline in commodity prices is
deflating growth and the ripple effect is affecting the reality of lives on the
ground, thus necessitating the need to explore alternatives through the mining
sector.
Already, to
aid the realisation of African Mining Vision (AMV), especially in the Economic
Community of West Africa States (ECOWAS) region, the United Nations Economic
Commission for Africa (UNECA) has mulled plans to harmonise policies in the
sub-region to aid the management of mines and natural resources.
The Africa
Mining Vision is Africa’s own response to tackling the paradox of great mineral
wealth existing side by side with pervasive poverty. It focuses on integrating
mining much better into development policies at local, national and regional
levels; that means thinking about how mining can contribute better to local
development by making sure workers and communities see real benefits from
large-scale industrial mining and that their environment is protected.
It also means making sure that nations are able to negotiate contracts with mining multinationals that generate fair resource rents and stipulate local inputs for operations. And at regional level, it means integrating mining into industrial and trade policy.
It also means making sure that nations are able to negotiate contracts with mining multinationals that generate fair resource rents and stipulate local inputs for operations. And at regional level, it means integrating mining into industrial and trade policy.
According to
stakeholders, Nigeria is endowed with huge solid mineral deposits, with about
34 products identified in commercial quantities in different parts of the
country.
The US
Geological society ranks Africa as the largest or second-largest reserve of
bauxite, cobalt, industrial diamonds, manganese, phosphate rock, platinum group
metals and zirconium. The products produced from these minerals are found in
everyday life such as plastics, tiles, steels used in construction among
others.
However, the
failure of Nigeria, since independence in 1960, to put in place a structure
that will make the benefits of the exploitation available to all Nigerians has
been the bane of the country.
A study by
the Word Bank on the shortcomings of African territories in the eyes of miners
revealed a need for infrastructure, stable legal systems, a predictable fiscal
regime, profit repatriation guarantees, and
access to foreign exchange.
access to foreign exchange.
“The
low activity in the solid mineral sector is not yielding the desired financial
revenues as there are scanty records of payment of taxes and royalty to the
government. Nigeria is losing lots of resources from the untapped mineral
deposit as well as from the little that is being mined mostly by illegal miners
who smuggle the products out of the country”, says
the Managing Director of the Nigerian Export-Import Bank (NEXIM Bank), Roberts Orya.
Orya
indicated that Nigeria could make the exploitation of solid minerals the mainstay
of the economy. He queried how the country could be earning paltry revenue and
dividends
with all the huge solid mineral reserves while in South Africa, the mining industry remains a cornerstone of the economy; making a significant contribution to economic activity (accounts for about 18 per cent of GDP – 8.6 per cent direct, 10 per cent indirect and induced), job creation (one million jobs – 500 000 direct and 500 000 indirect); and foreign exchange earnings creates (more than 50 per cent of all foreign exchange earnings).
with all the huge solid mineral reserves while in South Africa, the mining industry remains a cornerstone of the economy; making a significant contribution to economic activity (accounts for about 18 per cent of GDP – 8.6 per cent direct, 10 per cent indirect and induced), job creation (one million jobs – 500 000 direct and 500 000 indirect); and foreign exchange earnings creates (more than 50 per cent of all foreign exchange earnings).
Using the
Australian perspective as a reference point for Nigeria, Australian High
Commissioner to Nigeria, Jon Richardson
explained that a well-managed minerals sector could increase revenue flows;
improve employment, income and enterprise opportunities; and foster other industries.
With the
decline in global oil prices, he noted that Nigeria needs to embrace the
African Mining vision and encourage a transparent, equitable and optimal
exploitation of mineral resources to underpin broad-based sustainable growth
and socio-economic development.
Richardson
noted that his country is willing to partner with Nigeria by sharing its
expertise and collaborating with the government in aiding the development of
the nation’s mining sector.
He said: “Investment will go to where the return is the best and
minerals will go into the same global market at the same price. Science and
technology need to be applied in geology, processing, engineering, automation,
logistics as mining has gone beyond digging up dirt even as there is emphasis
on sustainability effects of mining. Investors also want a conducive
environment before accessing a market. Nigeria needs to address that.”
On his part,
Director-General, Nigerian Geological Survey Agency (NGSA), Alex Nwegbu explained that good
investment for explorations will be a key to incentivising mineral investment
that will return many folds in the form of improved economic growth.
He added
that the ultimate goal for the country is to grow and sustain the economy by
consuming mineral resources and not by exporting them. Similarly,
Director-General, Nigeria Mining Cadastre Office, Mohammed Amate, while speaking on the nation’s mining licensing
process stated that the system has so far improved tremendously the speed with
which mineral titles are processed and granted, adding that a transparent,
efficient and independent mineral title administration is considered key to attracting and
maintaining mining investments in the country.
“The
Mining Cadastre Office will thus strive to ensure the continuous administration
of Nigeria’s mineral titles using the principles of “first come, first served”
and “use it, or lose it”, he
emphasised.
Although
Chinese demand for African commodities and investments continues to grow
largely due to the Chinese attitude of limited political interference as well
as value-added investments associated with mining projects, the question
remains if Nigeria and other African countries will continue to wait for other
countries to exploit their resources when such can be used to hasten
development and growth?
“Awakened
by the commodities super cycle downfall, time is right for Africa to accelerate
its commodity-based industrialisation, as promoted by the Economic Commission
for Africa. It promotes an industrialisation policy that leverages the
continent’s abundant resources and changing organisation of global production
process. This entails adding value to commodities, improving its backward
integration, and expanding global value chain linkages to other areas of the
economy.
“Apart from providing employment, income, price and non-price benefits, African countries, by adding value to their raw materials locally, could also bring about diversification of technological capabilities, an expanded skills base, and deepening of individual countries’ industrial structures”, Lopes added. (Source: Guardian)
“Apart from providing employment, income, price and non-price benefits, African countries, by adding value to their raw materials locally, could also bring about diversification of technological capabilities, an expanded skills base, and deepening of individual countries’ industrial structures”, Lopes added. (Source: Guardian)
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