The PricewaterhouseCoopers is calling on the federal government of Nigeria to fix challenges in the mining sector
By Anayo Ezugwu
The PricewaterhouseCoopers, PwC, Nigeria has called on the federal government to address the challenges in the mining sector in the country. It said if the efforts being made to address challenges in the industry are sustained, Nigeria would witness significant increase in Gross Domestic Product, GDP.
At the third edition of the Nigeria Mining Week in Abuja, on Wednesday, October 17, Uyi Akpata, country senior partner, PwC Nigeria, said unless government provide the necessary support for artisanal miners, projected growth in the sector could remain elusive. He noted that the miners would need to dilute their equity and bring in partners to make initial investments decisions since funding remained a critical challenge at the point of exploration.
Akpata restated the firm’s commitment to supporting the growth of the Nigeria mining sector in line with the country’s overall economic diversification efforts. “I am happy and proud that our efforts to bring together stakeholders in this sector yielded so much result. The sector has witnessed a level of continuity of policies leadership, which were primary challenges affecting the growth of the sector,” he said.
According to him, there has been a sustainable effort to keep to the agenda to develop the industry. He said with the right trajectory and sustained interest from domestic and foreign players, desired goals would become a reality in the country. “We have seen increase in the interest from the international community and from discussions made; there have been an increase in licenses granted to foreign investors.
“We have seen cases of celebrated projects that are now being recognised globally. We have seen efforts from the government side for engagement with the private sector and other stakeholders. With the amount of collaborations and conversations we are having today, we are moving from matters that will ordinarily be called challenges to problems solving.”
While admitting that expected boom in the sector could take time due to the nature of the industry, Akpata said, it was important to note that there has been sustained effort to move the industry forward. He said the expected increase would be as a result of the sustained effort on the part of private sector influenced by government providing the enabling environment through right policies, right implementation, and execution strategies to ensure the plans work.
He said the federal government must enhance the quality of information available about deposits to reduce the challenges confronting the small-scale miners. To him, since funding remains a key challenge at the state of exploration, operators must prepare to dilute their equity by bringing in partners.
“The right mechanism is equity financing and the government through the solid minerals development fund already set up equity financing for that purpose. I think what early stage miners need are partners who understand the terrain, government provides help but that does not address all the support early stage miners need,” he said.
According to the Nigerian Bureau of Statistics, NBS, mining sector contributed 8.71 percent to the real GDP in the sector quarter of 2018. The figure is lower than the growth rate of 9.19 percent and 9.67 percent recorded in the corresponding quarter of 2017 and the first quarter of 2018, respectively.
Analysing second quarter of 2018’s rate of growth against the second quarter of 2017 and first quarter of 2018 growth rates, there is a significant drop of –98.17 percent and -30.20 percent points, respectively. This drop may not be unconnected to the suspension in May 2018, of activities on the Nembe Creek trunk line.
The mining and quarrying sector contributed 12.32 percent to overall GDP in the second quarter of 2018, higher than the contributions recorded in 2017 second quarter at 9.08 percent but lower than the previous quarter recorded at 13.92 percent. In real terms, the mining and quarrying sector grew by –3.84 percent (year-on-year) in the second quarter of 2018. Compared to the same quarter of 2017 and first quarter 2018, it is lower by –7.34 percent points and –18.68 percent points, respectively.
The mining and quarrying sector consists of Crude Petroleum and Natural Gas, Coal Mining, Metal ore and Quarrying and other Minerals sub-activities.
– Oct. 19, 2018 @ 20:15 GMT |