The second quarter 2020 Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS) revealed that the contribution of mining to the economy was minimal. It is perhaps against this backdrop that informed Nigerians are of the view that unless the sector is reformed government won’t get anything tangible from an area that holds the same potential as the oil sector; BENJAMIN UMUTEME writes.
Mining of minerals in Nigeria accounts for only 0.3% of GDP, with the domestic mining industry remaining largely underdeveloped, leading to the country having to import minerals that can be produce domestically. As it stands at the moment, rights to ownership of mineral resources is held by the federal government, which grants titles to organisations to explore, mine, and sell mineral resources.
The mining sector is still largely underdeveloped despite its glorious past and abundance of mineral resources for development, including high-value metallic minerals, industrial minerals, and energy minerals. There was a time when Nigeria’s mining sector was booming, particular coal mining. Up until the late 1960s, the sector contributed significantly to the country’s GDP.
Today, it is estimated that Nigeria is endowed with about 34 solid minerals identified in 450 locations in the country. These include bitumen, located in the states of Ondo, Ogun, Lagos and Edo; gold located in Kogi, Niger and Kaduna; lithium located in Ekiti, Kaduna and Nasarawa; and uranium in Bauchi and Taraba states – to name a few.
However, none of these resources have been fully exploited, which would enable them to become major contributors to the economy. Much of the reason lies in the fact that since the 1960s, greater attention has been paid to its oil and gas sector. And for good reason; Nigeria is Africa’s largest oil producer and crude oil exports account for 70 per cent of overall government income.
With the government paying less attention to the sector, the few operators have taken advantage of the almost non-supervision to engage in underhand practices which most times have led mining host communities with the short end of the stick.
Mining communities’ woes
Mining host communities across Nigeria continue to suffer the fallout of formal and informal or artisanal mining. A case that readily comes to mind is the death of about 400 children from Lead poisoning. It was also discovered that thousands more were discovered to have excessive and unprecedented levels of lead in their blood. It was the worst recorded lead poisoning outbreak in history. And recently, some communities across four local government areas of Okpokwu, Ohimini, Otukpo and Ado in Southern Benue state had raised the alarm over “acute water crisis” – the danger of water poisoning and environmental degradation as a result of the pollution caused to Okollo stream, and Rivers Umabe, and Okpokwu, the people’s main source of water by strip coal mining going on at the upper region of Okollo stream in Effeche-Akpali in Ugbokolo Ward of the local government in the state. Earlier this year, Dangote Group mining firm had started a strip coal exploration and exploitation in the area.
Apart from pollution to the environmental degradation, Community Development Agreements (Casas) are not honoured coupled with human rights abuses that is meted out to employees that work in the mines. In Ebonyi state, for instance, mining companies engage minor that work on mines sites. And in Ogun, it’s the same story as women and children serving as stone crushers for miners in the state are paid pittances not even enough to cater for the education of the children or the medical bills of the women.
As far as mining industry expert Greg Odogwu is concerned, Nigeria’s extractive “industry is froth with numerous problems including fiscal injustice, environmental degradation, proliferation of abandoned open mining pits; consequences of climate change; security challenges; the vulnerability of women, children and disabled persons to rights violations; water and air pollution, negative impact on traditional livelihoods, destruction of eco-systems and unmitigated stress on water resources.”
Across Nigeria, the story is the same, as they all face similar challenges.
Govt not getting enough from sector
The solid minerals sector contributed N64.5 billion in 2015, N43.22 billion in 2016, N52.75 billion in 2017, and N69.47 billion in 2018 to the Federation account. However, with potentials the sector holds, analysts say the government is not getting effort from the resources at its disposal.
Thought solid mineral’s contribution to the federation account may be on rise, mining as a subsector is still very low. A look at the NBS Q2 GDP report, mining sector contracted by 6.60 per cent which is an indication that it’s contribution to the economy is still insignificant.
The technical adviser, Mining Strategy & Policy, Mineral Sector Support for Economic Diversification (MINDIVER) in the Ministry of Mines and Steel Development, Amanda-Lumun Feese, noted that, the “lack of transparency in revenue collection and weak accountability of resource revenue use; risk of Dutch disease (real exchange rate appreciation and inequitable inter-sectoral development); mineral revenues are spent disproportionately on current consumption compromising inter-generational equity; lack of long-term development plan that guides the allocation and use of resource revenues, inequitable distribution of mineral revenue and neglect of local authorities and communities living near mining areas.
“Lack of credible processes and institutions to ensure accounting and auditing of revenue and payments; weak implementation and enforcement of the mining law and regulations; weak revenue collection and assessment systems; no proper mechanism for coordination with other FGN MDAs – environment, finance, power, transport, works and housing, trade and investment; CBN, FIRS; Insufficiently regulated ASM and high informality; Proliferation of illegal miners, including Asian and African illegal immigrants at sites and Construction materials account for the bulk of revenue collection – over 68%” contributed to lower returns for government.
Addressing the anomaly
As a way of addressing the anomaly, the federal government in 2018 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. The MinDiver project was conceived as a strategic driving force that will help in midwifing the growth and development plan for a sustainable mining industry. (MMSD MinDiver procurement, 2018).
With dwindling revenue from oil, it has become imperative for government to diversify from oil and tap its abundant mineral resources. However, the executive secretary Global Rights Nigeria, Abiodun Bayewu, told Blueprint Weekend that “the country needs revenue from oil to diversify from oil.” To maximise benefits from the sector, analysts are of the view that reforms are needed.
Speaking at a virtual meeting last month, the minister of mines and steel development, Olamilekan Adegbite, said the Ministry had embarked on strategic reforms to ensure that minerals development bring the expected benefits.
The reforms, he said, revolve around providing good governance and fiscal integrity for a shared mining prosperity.
According to him, “While we remain focused on attracting private sector investment into the Nigerian mining industry, we also remain focused on ensuring that Environment, Social, and Governance (ESG) issues are not compromised.”
Moving forward
Going forward, Engr. Sallim Ade Salaam said, “Formalisation of ASM into cooperatives and Development and operationalisation of the ASM Remote Sensing Monitoring System; Automation of the Mining Cadaster Office (MCO) systems and decentralisation of the MCO’s activities into six zonal offices (which is near completion); Upgrade and strengthening of the capabilities of the Nigerian Geological Survey Agency (NGSA); Airborne survey for greater geo-science data; Archiving of geological data; Strengthened Mines Environmental Compliance Dept for effective environmental monitoring and compliance enforcement; and a Review of CDA, EPRP and De-commissioning plan in progress would go a long way to bring the much needed revenue into government coffers.
In his reaction, the executive director of Neighborhood Environment Watch Foundation, Dr. Kelechukwu Okezie, called for regularisation and regularisation of artisanal miners into aspects of the mining economy. He said further that enactment of laws specific to artisanal mining to regulate their operations and Enforcement of strict compliance to EIAs/audits.
He said: “Environmental Impact Assessment should be inclusive taking into cognisance gender dynamics and vulnerabilities. Carry out advocacy and strengthen the voices of host communities to speak out when mining pollutes their environment.
“Ensure closure of all mine sites on the polluter pay principle and leave the environment better than before. Empower the communities to weigh the environmental aspect of mining against the environmental benefits and ability to resist any form of mining. Strengthen all institutions of government with oversight to the environment and sanction laxity on the part of staff.”
