Nigeria has vast mineral resources that could boost its economy and create jobs, but they are largely untapped due to insecurity and poor regulation, experts said on Tuesday.
At the BusinessDay Solid Minerals Conference in Abuja, stakeholders in the sector discussed the challenges and opportunities of developing the mining industry, which currently contributes less than 1% to the country’s gross domestic product (GDP).
Kayode Falasinnu, the chief executive officer of Ava Capital Group, said that investors need assurance that their investments are safe and that the rules will not change arbitrarily. He also stressed the importance of engaging with local communities and protecting the environment from mining activities.
“Investors need the assurance that rules won’t change in the middle of the game. And what we’ve seen so far is we have not seen strong prospects. What we have seen is that most mining activities are carried out without the regulatory authorities knowing and without enforcing the rules, so we need an enhanced regulatory system,” he said.
He added that when communities feel exploited, they may resort to violence, which could disrupt mining operations and deter potential investors.
Nigeria has over 40 different types of minerals spread across the country, which could serve as alternatives to the dominant oil and gas sector. According to the World Bank, the mining industry has the potential to contribute up to 10% of the GDP by 2025.
However, the sector faces many challenges, such as illegal mining, lack of infrastructure, funding, skilled labor, and technology. The government has been trying to revive the sector through various reforms and initiatives, such as the Mining Act of 2007, the Roadmap for the Growth and Development of the Nigerian Mining Industry in 2016, and the Presidential Artisanal Gold Mining Development Initiative in 2020.
Malami Uba Sa’idu, the president of the Nigeria Geological Society, said that the sector also suffers from a human capacity gap, as many trained miners have left the profession or the country. He said that there is a need for professional accreditation, competence, and standards in the sector.
“There are institutions and exams for accreditations, for competence, there are standards and templates for importing minerals that are acceptable and have the integrity to pass the test this financial institution,” he said.
Amina Sijuwade, counsel at ADVOCAAT Law Practice, said that the sector needs more reforms that could scale up regulations, capacity building, and community development. She also said that there is a need for devolution of powers and benefits of the mining activities to state and local government levels.
“The problem in government has always been poor implementation of policies. And for the mining sector, it is currently underregulated, and many of the players do not have the capacity required,” she said.
Nigeria is not the only African country that is struggling to harness its mineral wealth. According to the African Mining Vision, a policy framework adopted by the African Union in 2009, Africa is endowed with about 30% of the world’s mineral resources, but it remains one of the poorest and least developed regions in the world.
The vision aims to promote a transparent, equitable, and sustainable exploitation of mineral resources that contributes to the socio-economic development of the continent. However, progress has been slow and uneven, as many countries face similar challenges as Nigeria, such as insecurity, corruption, environmental degradation, and social conflicts.
Despite these challenges, some experts remain optimistic that the mining sector can be a catalyst for economic transformation and diversification in Nigeria and Africa if properly managed and regulated.
Dr. Olumide Ayodele, the managing partner of Stears Business, said that the sector has the potential to create linkages with other sectors, such as manufacturing, agriculture, and services, and to generate revenues for the government and the people.
He said that the key to unlocking this potential is to have a clear vision, strategy, and governance framework that aligns the interests of all stakeholders, including the government, the private sector, civil society, and the communities.
“We need to have a vision of what we want to achieve with the mining sector, and then we need to have a strategy of how we are going to achieve it, and then we need to have a governance framework that ensures that everyone is on the same page and that there is accountability and transparency,” he said.
Source: BusinessDay
