Economic diversification: all eyes on solid minerals, digital economy, by Kola Amzat
Over decades, very unsuccessful attempts have been made by the successive administrations to diversify the nation economy from oil sector.
But, it’s instructive to submit that the efforts made so far have not been strategic, deliberate and profound enough, as they’ve yielded no notable and significant results.
Indeed, more of those moves have ended in the realm of policy formulation, with scant regard for their implementation.
Of course, it’s a stark reality that Nigeria largely remains a mono-cultural economy.
This is the huge challenge a country with population of about 230-250 million people have been battling with for decades. Absolute dependent on crude oil revenues!
It’s indeed incredible how Nigeria and her people have been surviving this obvious challenge. This huge population hanging only onto oil revenues over the last 4-5 decades for survival! It’s simply unfathomable!
The above reality is the main reason why Nigeria and her people are continually under stress.
The nation economy is seriously troubled, with the continual worsening position of domestic currency and very disturbing state of the foreign reserves account.
Infrastructures facilities across the nation are suffering for lack of adequate funds for their rehabilitation and reconstruction.
Educational standard is pitiably on decline consequent upon the inadequate funding to ensuring that the sector rubs shoulder with its counterpart across the globe.
It’s a reality that the nation health facility is fast deteriorating, with the collapse of medical infrastructures across the country, and more importantly, with medical personnel relocating abroad, for pastures new.
Government just don’t have the wherewithal to ensure that the services of Nigerian medical personnel within the country are retained.
It’s an understatement to submit that for years, live expectancy in Nigeria has significantly dropped following huge challenges in the medical sector.
The obvious disappointment being encountered through continual stagnation in the solid minerals, agricultural and digital economy sectors, provided enough justifications for Asiwaju Bola Tinubu to make economic diversification as fulcrum of his 7 Points Agenda while canvassing for votes of Nigerians in all the nooks & crannies during the recently concluded presidential elections.
And, after his inauguration, he resolved to walk the talk by identifying egg heads in the persons of Dele Alake, an experienced and accomplished public administrator, as well as a vibrant, resourceful, IT savvy and very adventurous Bosun Tijani, as Ministers in charge of solid minerals development, as well as Digital & Communications ministry respectively.
And from what is coming from the stable of the two ministers, it appears there would be light at the end of the tunnel.
In them, the president might have made perfect fits for the two ministries.
The ministers have rolled out their strategic initiatives and plans, in pragmatic terms, good enough to unearth the hidden Treasures in both sectors.
This writer is of the conviction that, with their laid out plans already in the public domain, with a view to igniting and re-energizing the operational activities in the two ministries, it may not be too long for the sectors to start contributing significantly to FAAC, and more importantly, competing on the same pedestal with the oil sector.
For emphasis, Nigeria has deposit of more than 44 minerals spread across the country and in commercial quantity, too. But, for strategic reasons, seven (7) are being prioritized for exploitation on the basis of data availability, as well as economic viability. The 7 minerals in the priority list are gold, barite, iron ore, lead/zinc, coal, limestone and bitumen.
This however don’t indicate that the other 37 minerals resources are not being exploited and mined. But, largely the revenue being accrued therefrom, are simply being diverted into the private coffers of the traditional rulers, members of political class and illegal foreign miners, being aided by security agencies.
Presently, there is a Gold reserve deposit of about 757,000 Oz, valued at $1.4 billion based on the average market price.
Nigeria’s Barite deposit reserves of over 21 million metric tons is the 4th largest in the world.
Iron Ore reserves of about 3 billion metric tons in our country is the 6th largest in the globe.
There is an estimated 10 million tons of Lead/Zinc spread in more than eight (8) states across Nigeria.
Proven Coal reserves of about 639 million metric tons, as well as Inferred reserves of more than 2.75 billion metric tons are presently under Nigeria soil.
There is deposit of 10.6 billion tons of Limestone spread across 14 states of Sokoto, Gombe, Benue, Kogi, Edo, Oyo, Ogun, Cross River, Ondo, Plateau, Bauchi, Akwa Ibom, Enugu and Ebonyi states.
Well stocked In Nigeria earth is a proven reserve of 42.47 billion tons of Bitumen, a quantity estimated to be second largest in the entire world.
How else could nature help a country!
With the humongous figures above, it’s crystal clear that, the solid mineral sector has not live up to its potentials.
The pertinent question: With the Nigerian deposit of array of ‘A’ rated mineral resources in their humongous quantity, why has it been difficult for solid minerals sector to be a major contributor to FAAC?
Why has the nation willingly provided platform for economic saboteurs and agents of darkness to be continually thriving through plundering her precious endowments by nature?
About a decade ago, the sector was projected with potentials to contribute 3% to the nation GDP growth. This has not happened. The sector abysmal performance is not unconnected with numerous challenges plaguing it.
In the last three decades, there is prevalence of illegal mining activity following the neglect and abandonment of the sector by the successive administrations. It’s instructive to note that 80-85% of mining operational activities are artisanal and primarily informal. Why must this be so, if the government attention is indeed in this sector?
Indeed, a past minister in charge of the sector confirmed that Nigeria loses a huge sum of $9 billion annually to illegal gold mining and smuggling.
Tragically, some of these economic saboteurs are foreigners, who connived with the traditional rulers, security personnel and other unpatriotic Nigerians to rip the nation of its treasure.
The Nigerian Minerals and Mining Act of 2007, as amended empowered the Solid Minerals Development with sweeping power to squarely deal with this. But, it’s incumbent on the Minister to be patriotic and be willed to enforce to the letter the provisions of the Act.
It’s also absurd that the states have little or no control over the minerals resources even though the resources are located in their states, as the Act vests primary ownership and control of the minerals only in Federal Government.
Of course, this is a major challenge to the growth of the sector and the main reason why illegalities in the sector pervades. It’s important and very urgent that the President must revisit this imbroglio, perhaps through the amendment of the 2007 Minerals and Mining Act with an Executive Bill to the National Assembly.
There is also the challenge of environmental degradation, loss of livelihood, conflicts and loss of cultural heritage, among others.
Another major challenge is the persistent insecurity that is bedeviling the sector. Illegal mining has been largely linked to insecurity in many communities, with particular reference to Zamfara, where arms are being exchanged for mineral ores, with the political class, traditional rulers and highly placed individuals continually conspiring with Chinese nationals to plunder the nation’s resources.
Sadly, the Chinese are alleged to be funding the militant groups, as well as perpetrating several human rights abuses, including inadequate wage payments to mining workers.
Insecurity directly linked with mining activities includes communal unrest, banditry, kidnapping and terrorism.
The Minister of Defense and the Minister of State for Defense are both familiar with the enormity of insecurity in the country, as they were immediate past governors of two states comprehensively ravaged for years by banditry and insurgence.
Therefore, with their present portfolios and experience in this challeng, they should be able to collaborate with the Service Chiefs and Security Agencies to completely decimate and bring to a halt, the challenge of insecurity across the nation, particularly in the areas where the minerals resources are located.
Other challenge impeding the growth in the sector is lack of revenue earnings formula. Even though revenue generation in the industry is believed to have imploded following the re-enactment of the Nigerian Minerals and Mining Act in 2007, yet, this growth is largely motionless on account of lack of a clear fiscal regime in the sector.
Some of the fiscal issues includes a lack of a well-defined fiscal framework, erroneous and unreliable production statistics, revenue leakages, disproportionate and unjustified tax incentives, and the involvement of subnational governments.
There is also the issue of multiple taxation in the sector, all of which the minister is expected to address in order to drive a remarkable growth in the sector.
It’s the responsibility of RMAFC to revisit this challenge of fiscal issue as it affect the mining sector with a view to finding a way out of this quagmire.
Very instructively, the Nigerian Minerals and Mining of 2007 Act, amongst other things, has charged & comprehensively empowered the Minister with the responsibility of ensuring the orderly and sustainable development of Nigerian’s mineral resources, creating an enabling environment for private investors, both foreign and domestic by providing adequate infrastructure for mining activities and also identifying areas where Government intervention is desirable in achieving policy goals in mineral resources development.
Coupled with the above is the Nigeria Mining Growth Roadmap developed to address the numerous issues confronting the sector with a view to placing the mining sector on world map. It highlighted immediate, short, medium and long-term timelines for key actions.
Should Nigeria successfully implement the proposed recommendations, there is no way that the remarkable growth would not return to the sector through new exploration activity, operations and production from active mining, functional processing and refining capacity, and higher value-addition in exports.
The ultimate result will be the creation of thousands of direct jobs, as well as thousands of indirect jobs.
Furthermore, the impact on GDP will also be significant as industries can use the sector’s output better, substituting for imports.
There is no doubt that, the Minister work is properly cut out for him with the implementation of the aforementioned Road map and more importantly, the patriotic and efficient implementation of Nigerian Minerals and Mining 2007 Act to its letter.
Meanwhile, it’s germane to point out here that the Minister of Communications and Digital Economy has been very impressive, focus and promising with the ways & manners he’s been driving the affairs of the ministry since his inauguration.
The Minister has rolled a blueprint document that highlights the ministry’s plans for the transformative power of digital technology and innovation to strengthen the nation’s economy. According to him, the blueprint is a detailed and progressive framework that encompasses five interconnected pillars which are: Knowledge, Policy, Infrastructure, Innovation, Entrepreneurship and Capital, and Trade.
The first pillar emphasized the place of knowledge in the Nigerian quest for Digital economy, as well as the ministry commitment to training 3 million early to mid-career technical talents over the next four years, and also prioritize their job placements. The strategy seeks to place Nigeria in the top 25 per cent percentile in research on the global stage, which will cut across Artificial Intelligence, Unmanned Aerial Vehicles, Internet of Things, Robotics, Blockchain and Additive Manufacturing.
Policy Formulation, the second pillar, is aimed at providing a platform for innovation and digital entrepreneurship to thrive.
The third pillar, policy initiative is expected to encourage investment, research and development, and the protection of intellectual property.
Innovation, Entrepreneurship and Capital-all components of the fourth pillar is aimed at boosting the growth of startups, specifically those providing solutions for critical sectors of the nation’s economy.
The pillar is also emphasized collaboration with other ministries and parastatals including private sector stakeholders.
Also contained in the blue print is the fourth pillar expected to catalyze a digital transformation that will impact the country entire population by connecting communities and businesses. In order to ensure connectivity, the ministry will focus on executing the nation broadband strategy to lay 95,000 kilometers of fiber optic cable across the country.
Also highlighted in the blueprint is the fifth pillar targeted at improving business model for the Nigerian Postal Service and modernize 50 per cent of NIPOST’s locations by the end of 2027, drive up capacity utilization of the Nigerian Communications Satellite to about 75 per cent by the end of 2027, and also increase the regional market share of the satellite.
Under the fifth pillar as outlined in the blueprint, he confirmed that ministry is committed to positioning Nigeria as a major player in the African and global technology ecosystem.
If the above strategic initiatives are faithfully, patriotically and dutifully implemented, there exists is no doubt that Nigeria bid for economic diversification would soon manifest.
This writer is of the view that Nigerians should be excited with the blueprints that have flowed from the stable of the ministers.
Even though, over the years there have been colossal disappointment in the policy(s) formulation and their sincere implementation, but, it’s important that we give the new helmsmen a chance.
All greater countries around the world grappled with diverse challenges on their way to prosperity, growth and development. Nigeria won’t be an exception.
But, I’m of strong conviction that the nation has the capacity to emerge from this rubbles and despondence to hug greatness. It’s in our hands.
Let’s cultivate unique and positive attitude of having trust and confidence in the nation leadership to take us out of this impasse.
Kola Amzat (FCA, FCIB),
Lagos based Financial & Management Consultants,
09077509348.
