PricewaterhouseCoopers, PwC Nigeria, has identified the reasons why Nigerian economy is yet to feel the impact of the Solid Minerals Development Fund, SMDF. Cyril Azobu, head, advisory and mining sector lead, PwC Nigeria, said that many issues have continued to constrain the sector despite federal government efforts.
Azobu said commercial banks had remained doubtful and continued to see the industry as high risk. In addition, the existence of multiple regulations is reducing investor confidence as the cost and requirements have contributed to a seeming lack of interest in the industry. Established by the 2007 Mining Act and inaugurated in 2013, the Solid Minerals Development Fund, SMDF, had struggled to take off, despite its good intentions.
The government’s goal is for the solid minerals sector to contribute three percent to the gross domestic product, GDP, by 2025, currently, it contributes less than half a percent. The objectives of the SMDF are to develop human and physical capital; geo-scientific data gathering, storage, and retrieval; the purchase of equipment by state-owned mining institutions; the provision of infrastructure; and the provision of extension services to small-scale and artisanal mining operations.
It is expected to catalyse the minerals sector mainly by providing access to financial resources and training and by formalising the status of artisanal miners, this activity is envisaged as a way to reach the three-percent target. The first solid minerals roadmap, developed in 2015, had the objective of raising the sector’s contribution to the GDP to five percent by 2015, and 10 percent by 2020. Unfortunately, this target proved to be unattainable, and it was lowered to three percent by 2025.
Azobu said data, which was at the heart of the industry, was not robust enough to support investment inflows and key infrastructure such as access roads, dedicated rail lines, power, among others remain a challenge. He, however, expressed optimism that if the government maintained the drive and make the right choices, the solid minerals sector could contribute up to three percent of GDP by 2025 as predicted in the roadmap, up from a current contribution of just about 0.5 percent.
He agreed that there had been some notable achievements in the sector in the last few years. For instance, there have been efforts to improve the sector’s regulatory framework with the enactment of new laws and establishment of the National Council of Mining and Mineral Resources Development.
Notably, the Nigerian Institute of Mining and Geo-sciences, Jos (Establishment) Act was signed into law by the President in November 2018 for the training of manpower for the sector and research. In addition, the Federal Government in the same year presented a roadmap for the “Development of Nigeria’s Industrial Minerals”, developed by the World Bank-assisted Mineral Sector Support for Economic Diversification (MinDiver) Project. Also, the National Gold development efforts saw the issuance of the first gold refining licence in the year.
Furthermore, efforts to curb illegal mining had been ramped up by the provision of surveillance vehicles for mine inspectors across the country, and increased inter-agency co-operation. “The ministry has also continued on its journey to transform its processes by digitising some of its key activities,” Azobu said, adding that efforts were ongoing to automate the ministry’s activities with the provision of geographic information system (Egis) web portal and electronic submission of licences, permits and certificates to improve efficiency and speed-up the processing of transactions.
GIS is a framework for gathering, managing, and analysing data. Imbedded in the science of geography, GIS integrates many types of data. It analyses spatial location and organises layers of information into visualisations using maps and 3D scenes. “This has become even more critical in the light of the African Continental Free Trade Area Agreement, AfCFTA, Agreement coming into force,” Azobu said.
According to him, the fixation on extraction and exporting of raw minerals and ores at the expense of value addition is a big disservice, especially as Nigeria continues to depend on importation of finished products. This, he stated, had further worsened by other African countries potentially taking advantage of the AfCFTA to invade our economy. “We must assess how competitive Nigeria will be against other more developed mining territories on the continent.”
– Sept. 20, 2019 @ 17:12 GMT |